RSA Insurance Group Plc, which suspended three of the top executives at its Irish unit late last week, said it commissioned an independent investigation into issues the company expects will be isolated to Ireland.
Chief Executive Officer Simon Lee appointed PricewaterhouseCoopers LLP to review the insurer’s Irish claims and finance functions that prompted the suspensions and an injection of capital into the unit, London-based RSA said in a statement today. RSA said on Nov. 5 it would miss its profitability target.
“We are extremely disappointed with the issues which have been identified and their financial impact on the group,” Lee said in the statement. “While the investigation is ongoing, I am confident that these issues are isolated to the Irish business.”
A routine internal audit uncovered the issues in the claims and finance functions at the Irish division, RSA said on Nov. 8. The insurer said it now expects its 2013 operating result to be 70 million pounds ($112 million) lower than market estimates.
“While these issues are serious, they do not have a material long-term impact on the group,” Lee said. “Our capital position remains robust and we remain committed to our dividend policy, which is aligned with market expectations.”
RSA, the U.K.’s biggest non-life insurer by market value, told investors on Nov. 5 that the company will miss its profitability target in the wake of last month’s European windstorms. The stock tumbled 5.8 percent to 120.8 pence last week.
The company suspended the Irish unit’s CEO, Philip Smith, as well as Rory O’Connor, RSA Ireland’s chief financial officer, and the unit’s claims director, Peter Burke.
RSA Insurance Ireland is the biggest non-life insurer in the country, with more than 900,000 customers. It reported profit of 25 million pounds in 2012.
–Editors: James Amott, Heather Langan