Saturday 25 November 2017

Anatomy of RSA's Irish dilemma

* RSA (formerly Royal and Sun Alliance) has a long tradition in the Irish market, writing non-life insurance business since 1721.

* In 2009, it set up as an Irish-registered and regulated company under the RSA Group umbrella.

* In 2010, RSA group bought the 123.ie online consumer insurance company for €83m. This acquisition helped make RSA Insurance Ireland the number one provider of home and motor insurance in the market. But rapid growth came at a cost.

* On November 4 this year, its British parent, which is quoted on the London Stock Exchange, shocked the market when it issued a profits warning due to under-provisioning in its Irish division.

* By the end of that week, the company was forced to put £70m (€83m) into the reserves of the Irish division.

* And it suspended three senior executives -- chief executive Philip Smith, chief financial officer Rory O'Connor and claims director Peter Burke -- pending the outcome of an investigation into issues involving its Irish claims and finance functions.

* Mr Smith resigned on November 28, saying he and his family were traumatised by recent events, and he claims the ongoing investigation by RSA has a pre-determined outcome.

* Yesterday, RSA said it had to inject another £135m (€160.4m) into its beleaguered Irish operation. Its chief executive officer Simon Lee resigned and the company issued another profits warning, its third this year.

* The share price took a new pounding on the LSE yesterday, and is now down almost 30pc since the problems in Ireland first emerged in November.

Irish Independent

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