RSA tacks on financial health warning to accounts
TROUBLED insurer RSA has been forced to add a financial health warning to its latest company accounts, which report profits of €44.5m in Ireland last year.
RSA Insurance Ireland's UK parent was forced to inject €100m in cash into the business earlier this month, after a financial hole was discovered on the Irish unit's balance sheet following an internal audit.
The audited accounts for 2012 – which have been submitted to the Companies Registration Office – were prepared in April, before the discovery of an €83m hole in the finances.
That financial shortfall is understood to relate largely to so-called under-provisioning – a failure to set aside enough cash to cope with insurance claims to meet Central Bank rules.
Now the board of directors of RSA Insurance Ireland has taken the unusual step of adding what amounts to a financial health warning to their own, audited company accounts.
In a single page add-on to the accounts, the directors said: "The enclosed Financial Statements for the year ended December 31 2012 were approved by the Board of Directors of the Company on April 29 2013. Since then issues in the Irish claims and finance functions have been identified.
"Those matters are still under investigation at the time of filing.
"Should they have a material impact on the company's financial position as of 31 December 2012 this will be addressed at the earliest opportunity."
The 2012 financial accounts were audited by Deloitte & Touche, before they stood down as auditors for RSA in May this year.
The accounts, which were prepared in April state that Deloitte's stepped down ahead of an impending appointment to undertake consultancy work for RSA in Scandinavia.
KPMG took over as auditors following the resignation of Deloitte.
The 2012 accounts show that the insurer made pre-tax profits of €44.47m in 2012, up from €6.7m recorded the year before.
Since then, however, the company has warned that there will now be a loss of (€83m) in the company accounts due to the problems discovered at the Irish operation.
Accountants PWC are currently investigating the financial situation at RSA here, and are due to report to the company by the end of the year, and that report will be shared with the Central Bank, which supervises the insurance industry.