These are difficult times for the market leader
INSURANCE giant RSA is the market leader for motor and home insurance in Ireland with 800,000 customers.
It is also one of the oldest, having had a presence here for more than 280 years. It employs more than 800 people at its HQ in Dundrum in Dublin and elsewhere.
Yesterday, the company was at pains to point out that neither customers nor staff were at any risk.
Every insurance policy remains completely valid and the company has been able to plug the hole in its finances from the giant's other operations which stretch to every corner of the globe. There is also no question of the taxpayer having to stump up.
RSA, best known for its 123.ie insurance website, was already in the headlines this week after raising premiums by 13pc, a huge hike that raised eyebrows because it ran contrary to rivals.
The firm paid more than €60m to buy 123.ie in 2010, seen as a high price in a tough market, though the company has won a huge market share since.
The company blamed higher claims for increasing the premiums. It is sticking by that claim but it has now emerged that there are much bigger issues at the firm's Irish operations.
In effect, a financial hole of €83m has been discovered on its balance sheet.
There is no question of missing cash, it is thought the issues are linked to so-called provisioning money that has to be set aside to cope with potential claims under Central Bank rules.
That's what prompted the British parent to pump in €100m to plug the hole.
In the longer term, policyholders are likely to be squeezed on premiums to allow the parent to recoup that €100m.
The former Royal & Sun Alliance (RSA) is a global insurance giant. The London Stock Exchange-listed company was founded in London more than 300 years ago and operates across much of the world.
Yesterday's news caps a terrible week for the insurance company.
Shares in RSA tumbled 6.2pc in London after the insurer warned last week's storms across Britain and the rest of Europe would hit profits. That warning wiped £282m (about €340m) off the stock market value of the FTSE 100 company.
"This year is proving to be an exceptionally tough one for weather events for the group," chief executive Simon Lee said.
Yesterday's news came after markets closed – too late to have any effect on the shares but executives will be watching on Monday morning to see whether this latest problem will knock the share price still further.