This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-25362379
The article has changed 7 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
RSA shares fall 16% as chief Simon Lee quits over Irish woes | |
(about 1 hour later) | |
Shares in RSA Insurance Group fell 16% in early trading after the firm's chief executive, Simon Lee, resigned amid deepening problems at its Irish unit. | |
RSA said he would leave the group with immediate effect. | |
Last month, RSA suspended the head of its Irish unit, Philip Smith, who later resigned, after alleged accounting irregularities were discovered. | Last month, RSA suspended the head of its Irish unit, Philip Smith, who later resigned, after alleged accounting irregularities were discovered. |
RSA has now said the unit's reserves will need to be strengthened by a further £130m. | RSA has now said the unit's reserves will need to be strengthened by a further £130m. |
The majority of this was to cover an increase in bodily injury claims in the motor insurance sector, it said. | |
"This is in addition to the £70m previously announced on 8 November relating to claims and finance issued in Ireland," the firm said in a statement. | "This is in addition to the £70m previously announced on 8 November relating to claims and finance issued in Ireland," the firm said in a statement. |
It added that strengthening its Irish reserves and last week's storms in Europe would hit the group's earnings for this year and possibly reduce dividends. | |
"We now expect mid-single digit group return on equity in 2013," it said. | "We now expect mid-single digit group return on equity in 2013," it said. |
Problems 'isolated' | Problems 'isolated' |
RSA, which owns the More Than brand, said that until it could find a permanent replacement for Mr Lee, Martin Scicluna would become executive chairman. | |
Mr Scicluna said Mr Lee had "felt it was in the best interests of the group that he step down to enable a change in leadership". | Mr Scicluna said Mr Lee had "felt it was in the best interests of the group that he step down to enable a change in leadership". |
The problems in Ireland were discovered after a routine audit, but RSA has not given details about what happened. | The problems in Ireland were discovered after a routine audit, but RSA has not given details about what happened. |
Mr Lee said last month that RSA was "extremely disappointed with the issues which have been identified and their financial impact on the group". | Mr Lee said last month that RSA was "extremely disappointed with the issues which have been identified and their financial impact on the group". |
But he maintained that the problems were "isolated to the Irish business" and that "no policyholders have been affected". | But he maintained that the problems were "isolated to the Irish business" and that "no policyholders have been affected". |
Analyst Eamonn Flanagan of Shore Capital said that the share price fall could make RSA vulnerable to a takeover bid. | |
"Too strong a negative reaction is likely to deliver an opportunistic bid for the group, in our view," he added. |