RSA Insurance under a cloud. Shares fall 14% after probe into Irish unit

Shares in RSA Insurance Group tumbled after the company suspended the CEO of RSA Ireland, and two other senior executives.

by Elizabeth Anderson

Shares in insurance group RSA fell 14% this morning as the City reacted to the news that the firm has launched an investigation after finding a black hole in its Irish business.

On Friday the group suspended the region’s CEO and two other senior executives, after ‘issues in the Irish claims and finance functions’ found during a routine audit. RSA – owner of the More Than brand – was also forced to make an emergency €100m (£84m) capital injection into its Irish business.

Group chief executive, Simon Lee, said the problems could wipe £70m off profits this year. The group has appointed PwC to carry out an investigation and to explain why the issue remained undetected until last week.

‘We are extremely disappointed with the issues which have been identified and their financial impact on the Group,’ Lee said in a statement. However, he said that the problems were an isolated case and that no policyholders would be affected.

It came after the FTSE 100 company issued a profits warning earlier last week. The group has been knocked by severe weather, including the recent UK storms and Scandinavia and floods in Canada. Losses from the European windstorm are expected to run into around £45-65m.

RSA’s shares are currently worth 109p, down 9% on the previous close. Two weeks ago they were trading at 129p.

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