Sunday 24 September 2017

RSA sacks two senior officials over 'claim irregularities' at division

RSA chief executive Philip Smith resigned in November
RSA chief executive Philip Smith resigned in November
Colm Kelpie

Colm Kelpie

INSURANCE group RSA has fired two senior officials at its Irish wing in relation to large loss and claims irregularities at the division.

RSA Ireland chief financial officer Rory O'Connor and Claims Director Peter Burke were dismissed on Wednesday, the UK insurer said.

The sackings were conducted parallel to and independent of an investigation by accountants PwC, which found some top brass at the division collaborated to bypass financial controls.

RSA Ireland chief executive Philip Smith resigned in November, while group chief executive Simon Lee stepped down last month amid the independent RSA investigation into the £200m (€240m) black hole at the Irish operation.

Martin Scicluna, RSA executive chairman, said the issues that emerged were completely unacceptable.

"The board is now confident that the financial and claims irregularities were isolated to Ireland and do not reflect the quality of our control framework elsewhere," he said.

DELIBERATE

"Our investigations have confirmed that the claims irregularities in Ireland were, in large part, the result of deliberate collaboration between a small number of executives there."

The insurer is also said to be reviewing its business targets that help determine pay and bonuses after the British insurer found that the targets at its Irish division may have been "too aggressive".

"We set targets for them which we thought were challenging but achievable," said RSA chief financial officer Richard Houghton.

"We actually ... reduced those targets because we thought that they might have been a little too aggressive."

RSA said Adrian Brown, head of UK and western Europe and acting chief in Ireland, cut some of the targets when he took over in November and conducts quarterly reviews to make sure they are in line with the London-based company's performance.

"Evidence suggests that certain individuals acted in such a way as to intentionally circumvent parts of the existing control framework," the PwC report said. Both Mr O'Connor and Mr Burke were dismissed after the completion of appeal processes.

Irish Independent

Also in Business