RSA Group chief executive Simon Lee has resigned from his position, effective immediately, amid an ongoing review of several issues in the company’s Irish business.
While a replacement is sought, Martin Scicluna, current non-executive chairman will become executive chairman, the company said. The recruitment process has begun with the appointment of an executive search firm and is expected to take a number of months.
Related: RSA launches independent investigation after issues found with Irish claims, finance functions
RSA said Lee will not receive “any payment beyond his contractual entitlement.”
“Simon felt it was in the best interests of the Group that he step down to enable a change in leadership,” Scicluna commented in RSA’s statement. “He has offered to help in any way that he can to ensure a smooth transition.
“I would like to thank Simon for his contribution to RSA over the last decade. He has provided strong leadership to the business over the last two years, a period that has featured a number of significant challenges. In his previous role as Chief Executive of International he was instrumental in developing the Group’s global portfolio. The Board wishes him well for the future.”
The company also announced the completion of its review of Irish reserves, noting that reserves will need to be strengthened by £130 million, mainly related to bodily injury and strengthening in motor and liability lines.
That’s in addition to £70 million announced in early November related to claims and finance issues in Ireland. “RSA Group plc intends to inject £135m of capital into RSA Insurance Ireland today to ensure that the solvency ratio of RSA Insurance Ireland is maintained above 200%,” the company said in a statement Friday.
Meanwhile, the PwC review of issues in the Irish business is ongoing and the firm is expected to report back to RSA in January.
“The significant reserve strengthening in Ireland represents a further negative event and places additional strain on the capital metrics of the Group,” Scicluna noted in the statement.
“The impact of this reserve strengthening, alongside the extreme weather in 2013 and the effect of financial irregularities in Ireland will be taken into consideration in the Board's dividend decision in February.”
Storms in the United Kingdom and Scandinavia last week have led to net claims of £25 million for the group.
“I am initiating a full review of the Group’s businesses with the objectives of improving the capital strength of the Group, optimising the Group’s business portfolio and delivering a sustainable dividend into the future,” Scicluna also noted. “We will update on the progress of this review at our full year results presentation.”