RSA Suspends Executives at Irish Unit Amid Investigation
RSA Insurance Group Plc (RSA), the U.K.’s biggest non-life insurer by market value, said three top executives at its Irish unit were suspended amid an investigation into claims and finance functions.
The suspensions of Philip Smith, Rory O’Connor and Peter Burke are tied to issues that arose during a routine audit, the London-based firm said yesterday in a statement. RSA said it hasn’t made findings against any individuals. It expects 2013 operating results to be 70 million pounds ($112 million) lower than “current market expectations,” the company’s second profit warning in a week.
RSA Chief Executive Officer Simon Lee told investors on Nov. 5 that the firm will miss its profitability target in the wake of European windstorms. The Irish unit is the biggest non-life insurer in that country and the firm is “working closely” with regulators, RSA said yesterday.
“Given the action that we have taken, it demonstrates the rigorous nature of the investigation that we are undertaking,” said Jon Sellors, group and U.K. head of media relations at RSA Insurance Group Plc in London. “We aim to complete the investigation as soon as possible.”
Smith is CEO of RSA Insurance Ireland while O’Connor is chief financial officer, the firm said. Burke is claims director, according to the statement.
Sellors declined to provide contact information for the executives, who also didn’t respond to e-mails sent through their LinkedIn Corp. (LNKD) pages.
RSA said it injected capital into the Irish unit as a result of the investigation “to ensure its solvency ratio is comfortably in excess of 200 percent.” The insurer reported a regulatory issue to the Irish Central Bank, Ronan Sheridan, a spokesman for the regulator, said in an e-mail.
“A multi-stranded investigation has been commenced,” Sheridan said. “The central bank remains in close and regular dialogue with the company.”
RSA said the latest investigation is separate from a review of its Irish bodily-injury reserves announced earlier. The company said Nov. 5 that it would probably boost the reserves, which would “adversely impact the group’s 2013 performance.”
The RSA unit has more than 900,000 customers in Ireland, where it’s had a presence since 1721, Sellors said. The operation, which had a 2012 profit of 25 million pounds, sells through a network of brokers and the 123.ie website, he said.
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