Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 1°C

Search

Insurance: RSA seeks to draw line under Irish woes but warns of increase in weather claims

11:05 09 January 2014

An independent investigation has  found that "inappropriate collaboration" among  managers at the Irish division of insurance group RSA  led to a £200million hole in its finances.

An independent investigation has found that "inappropriate collaboration" among managers at the Irish division of insurance group RSA led to a £200million hole in its finances.

More Than owner RSA sought to draw a line under the scandal at its Irish arm today after an independent investigation found “inappropriate collaboration” among the division’s managers led to a £200million hole in its finances.

shares

The report, led by PricewaterhouseCoopers, confirmed that the issues were isolated to Ireland and that no further writedowns were required on top of the £200m already set aside.

However, there was further woe for RSA as it said that the flooding in the UK over Christmas and the big freeze in Canada would hit 2013 profits.

RSA said that its Irish finance boss Rory O’Connor and the division’s claims director Peter Burke were sacked yesterday following a disciplinary and appeals process. Irish chief executive Philip Smith had already resigned after being suspended.

The Irish crisis contributed to three profit warnings from RSA in six weeks in the run-up to Christmas, which led to the resignation of group chief executive Simon Lee.

RSA executive chairman Martin Scicluna said today: “The issues which emerged in our Irish business in 2013 were completely unacceptable and I have made it my personal priority to ensure that this never happens again.

“We acknowledge that there are lessons to be learnt and we are tightening elements of our control and financial framework in response to these events.”

RSA shares fell 2% amid fears over RSA’s balance sheet strength and as Panmure Gordon analyst Barrie Cornes said the latest weather losses amounted to “yet another profit warning”.

RSA said it was too early to put a figure on the impact of the weather claims, but Mr Cornes estimated profits could be knocked by another £35million.

He added that it was likely the final shareholder dividend would be axed, a payout which is under review as RSA seeks to boost its finances and as a result of the further weather hit.

RSA’s UK operations involve more than a dozen offices across the country, including a commercial insurance team based in Princes Street, Ipswich.

A routine internal audit flagged up problems in the group’s Irish arm in November, which it said would result in a £70m profits hit but a month later the amount set aside was increased by £130m to pay for a surge in motor insurance bodily injury claims in the Irish unit.

Last month it was reported that investors were calling on the 303-year-old business to put itself up for sale or dispose of international operations.

PwC, which scoured through electronic documents of some 60 staff at RSA, found governance controls were appropriately strict and there were no obvious signs that the issues in Ireland had been ignored by group bosses.

Fellow accounting firm KPMG and RSA’s internal audit team also conducted reviews, which concluded the issues were a one-off.

But PwC’s report said controls in Ireland were weak and has recommended tightening controls at local country levels and a further review of how policies are followed across the group.

RSA is working with the Prudential Regulation Authority in the UK and the Central Bank of Ireland to improve controls further.

It added that its search for a new chief executive was “progressing”. Mr Scicluna, who is leading a review of the group’s businesses, said: “The board and I remain confident that RSA will re-emerge as a stronger group during 2014.”

Related articles

shares

0 comments

The Orwell Bridge.

Police were called to the Orwell Bridge after concerns were raised over a man’s welfare on Friday afternoon.

The 

Woodbridge Marina Tide Mill, the area in which Suffolk Secrets is based. Picture: Mike Page.

A suspicious fire at a holiday cottage lettings agency in Woodbridge on Friday night is being investigated.

A body has been found in a flat in The Street in Bramford.

A man found dead in his flat after failing to turn up for work has been named locally.

Joe Stilgoe, headlining this year's Ipswich School Festival of Music. Photo: Prasanna Puwanarajah

Hailed Britain’s very own Harry Connick Jr, Joe Stilgoe makes a welcome return to the Ipswich School Festival of Music this year.

Medieval Mayhem at Framlingham Castle. Photo: Nigel Wallace-Iles

From medieval mayhem and country shows to classic vehicles and hip hop, there’s lots to enjoy this long weekend. F

There were 7,365 admissions to Suffolks two main hospitals in 2014/15 where obesity was the main reason for a person being admitted or was a secondary factor. Photo: PA.

Obesity levels are worse in Suffolk than every London borough, a new report revealing the growing challenges facing the county’s health chiefs has shown.

Henry Dunham and Sam Crimp visit Ipswich Town Football Club meet with the squad ahead of the pair's fundraising trek to Kathmandu in a few week's time, which will raise funds for charity in memory of Henry's sister Annie Hughes.

Two fundraisers from Suffolk have met with the Ipswich Town squad – after a chance encounter with a good friend of club boss Mick McCarthy.

Firefighters at the scene of a fire at The George, Wickham Market, in 2013

Fresh calls for answers as to the future of a medieval Suffolk pub have been issued after more than 200 people turned out to a public meeting on the matter last week.

USAF fighter planes from RAF Lakenheath taken from a C130 Hercules

Almost £250,000 has been paid out in compensation for damage, injuries and loss of livestock caused by low flying military aircraft in East Anglia over the past five years, figures show.

Pupils and Students outside Bealings Primary School where they are planning to boycott classes next Tuesday as a protest against SATS.

A group of parents from Suffolk are planning to take their children out of school for the day in a show of protest against SATs exams.

Most read

Most commented

HOT JOBS

Show Job Lists

Topic pages

Streetlife

Newsletter Sign Up

Great British Life

Great British Life
MyDate24 MyPhotos24