RSA launches independent investigation after issues found with Irish claims, finance functions

RSA Insurance Group has hired on PwC to conduct an independent review of issues in the company’s Irish claims and finance functions.

Last Friday, the company announced it had suspended RSA Insurance Ireland CEO Philip Smith, CFO Rory O’Connor and claims director Peter Burke, pending the outcome of an investigation, after “issues” were found during a routine internal audit.

“The review will focus on the financial and regulatory reporting processes and controls within the Irish business and the group oversight and controls of the Irish business during the relevant period,” RSA said in a statement on Sunday.

“The review will also assess the adequacy of the remedial actions being taken. PwC will report back to the RSA Board before the end of the year.”   

As a result of the issues it had identified, RSA estimates that its 2013 operating result will be £70 million lower than current market expectations, the company said Friday. RSA Insurance Ireland has informed the Central Bank of Ireland and is working closely with them, it added.

Adrian Brown (currently CEO UK & Western Europe) is now acting CEO, Chris Rash (currently group chief accountant) is acting CFO for RSA Insurance Ireland and David Pitt (currently claims director for UK & Western Europe) is taking operational leadership of the Irish claims function.

“We are extremely disappointed with the issues which have been identified and their financial impact on the Group,” Simon Lee, group chief executive for RSA noted in a statement Sunday.

“While the investigation is ongoing, I am confident that these issues are isolated to the Irish business,” he said. “No policyholders have been affected and all our Irish businesses continue to operate as normal.  Nevertheless, we want to ensure that the actions being taken in Ireland and across the Group are correct and that all lessons are learnt.”

“While these issues are serious, they do not have a material, long term impact on the Group,” he also noted. “Our capital position remains robust and we remain committed to our dividend policy which is aligned with market expectations for the full year final 2013 dividend.”