11th Nov 2013 06:37
LONDON (Alliance News) - RSA Insurance Group PLC Friday said it expects its full year operating result to be GBP70 million lower than current market expectations as a result of an investigation into its Irish business.
Ireland boss Philip Smith has been suspended, along with the operation's chief financial officer Rory O?Connor and claims director Peter Burke, until the outcome of an investigation into "issues in the Irish claims and finance functions" is reached.
The statement, issued after the market close Friday, represented the second warning in the space of a week regarding the insurer's full year performance.
In its interim management statement last Tuesday, RSA warned that it expects its full-year weather losses to be "materially above planning assumptions", as it warned that return on equity for the full year is expected to come in at under 10% as a result.
RSA Insurance has also had to inject capital into its Ireland business in order to ensure its solvency ratio remains "comfortably" above 200%. RSA said no policyholders have been affected and all its Irish businesses are operating normally.
RSA said no findings have been made against any of the individuals after a routine internal audit identified the issues.
RSA Insurance Ireland is working closely with the Central Bank of Ireland after notifying it of the news.
The unnamed issue found as a result of the internal audit is separate to the probable need to increase reserves in response to increased bodily injury claim trends in Ireland's motor market, as announced in RSA's third quarter interim management statement, published last Tuesday. The insurer said that review is continuing and still at too early a stage to make conclusions or to reliably estimate its likely financial results.
Net written premiums in Ireland totalled GBP291 million over the first nine months of the financial year, making up the bulk of the GBP560 million of RSA's net premiums written in Western Europe.
Adrian Brown, current CEO UK & Western Europe, is Acting CEO, Chris Rash, the current group Chief Accountant, is Acting CFO for RSA Insurance Ireland and David Pitt, the current Claims Director UK & Western Europe, is taking operational leadership of the Irish claims function.
RSA shares closed down 0.3% at 118.90 pence, Friday.
By Samuel Agini; [email protected]; @samuelagini
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