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Updated 10.53pm
RSA Insurance Ireland has suspended three of its executives, including its CEO Philip Smith, pending an investigation.
CFO Rory O’Connor and Claims Director Peter Burke have also been suspended pending the outcome of the investigation into issues in the Irish claims and finance functions of the company which were identified during a routine internal audit.
RSA owns and operates 123.ie. The company stressed that no policyholders have been affected and all our Irish businesses continue to operate as normal.
The company said today that as a result of these issues it estimates that its 2013 operating profits will be £70 million (€83.8 million) lower than current market expectations. RSA said it has informed the Central Bank of Ireland and is working closely with them.
The review is ongoing and so RSA said it is too early to draw any firm conclusions or to reliably estimate the likely financial impact.
As a result, RSAI plc today injected capital into RSA Insurance Ireland to ensure its solvency ratio is comfortably in excess of 200 per cent.
Three other executives in the company’s insurance group have taken over the posts of the suspended staff.
First published 6.55pm
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Wow !!!!… without making any accusations , this sounds serious.
Pity a few proper internal audits weren’t carried out in anglo, Irish nationwide etc….
Mike
I think you’re typically overlooking an important fact. RSA have already made an appalling loss!
If the boys have been bold, things have gone amiss and their is a case to answer. A slap on the wrist, gold plated pension and bonus is your punishment. The rest of us, lose everything and thrown in prison!
*there*
Please tell me this isn’t another bailout in the making..?
Another fu@k up you can be sure will be paid for by the taxpayer.
rodgers, I think you are typically putting your opinion in where it’s not wanted.
Kindly troll somewhere else .
Richie a private company taking action. This is good news surely?
Yea, another surcharge for insurance.
It’s resting in some lads account no doubt
There’s no way that this can really come back on the irish taxpayer. RSA can’t exactly impose an industry-wide surchage, and if they increase their own prices customers are free to move elsewhere. This is a loss that falls on RSA shareholders – and If the reason they’re under-reserved is that they declared the profits too early (which is a possibility) then the shareholders aren’t that much effected overall either.
Hope they had insurance cover for the loss.
Yeah they did increase the premiums on their customers
They could phone Sean Quinn for advice?
They didn’t make a loss, the profit was just not as much as they thought it might be.
Well, they may or may not be still earning a profit, if their profits are down by 80m, it’s possible they were only expecting 40m, could just be a way of spinning it to look better than it should to prevent a mass move of policies. News outlets often take press releases and move some words around to make it look like different.
The fact that there also needed an injection of capital to maintain solvency levels tells me there is more to this story that we’ve heard so far.
My road insurance company… policy expires mid-month… doubt I’ll be getting a nice renewal quote.
1,2,…..what the f**k happened to 3?
Please tell me of this road insurance that you speak of….
I think that your comment is ABSOLUTELY OUTRAGEOUS Emmet…..Everybody knows that you must never finish a sentence with a preposition…
That’s an urban legend. It is perfectly acceptable to finish a sentence with a proposition, and just as acceptable to start a sentence with a ‘but’.
I just insured my car with them today… :-(
Maybe, but it’s very poor use of the language…
Avail of the 14 day cooling off period if you wish, Anastasia.
But..but…but….
Thanks Brian!
Here we go again we had our fill of the banks now it is the turn of the insurance lot
Just got my insurance renewal quote from them earlier which had a not so nice €200 bumped on. They can feck off with themselves!!!
Its a predictable game 123 played & got bit in the ass. You join them, enticed with what seems an unbelievable quote, then u give them a second policy, say home insurance and a year later they pounce, hiking premiums. My home insurance doubled with not a single claim so looked at Avvia and shocked with a quote half of what 123 quoted. On top of their woes I suspect the big players have decided to bite back at the discounters. This said thank you 123 for saving me a fortune while it lasted.
Toni your premium hike probably had a lot to do with the EU gender equality initiative which saw female/male premiums equalised.
Male premiums didn’t go down unfortunately :(
We had 500 added to ours. Same car, same people on the policy, and an extra year of ncd. Changed, then realised they never added a year of ncb, which is out of date now. Will never use 123 again
Moved to them this year, got a great deal. My third change in 4 years. All the same, great price to get you and then they Jack it up hoping you won’t bother to look around.
Keep changing my friends and use them like they would use you.
Mario how many years NCB did you have?
I suspect recent purchases (i.e 123.ie / AonDirect) may have something to do with this.
*Aon Insure not Direct
I didn’t think they bought aon just thought they got their customer book. I got a great quote from them there last wk. Paid up and all……really hope they don’t go tits up, don’t think I’d get as good a quote!
As far as I know Aon Insure started out as insure.ie (http://www.mdc.ie/press1.htm), was sold to Aon and subsequently was purchased by RSA Ireland.
They will have probably have taken on outstanding loans as well. The company won’t go down, but the careers of some people involved might go up in flames if there was deliberate under-reserving to make things look good.
Premiums will surely go up across the board now.
Why?
Simple solution , change your insurer.
They have underpricing the market for a while, my bet is they had higher claims than their actuary tables predicted. Most of the major insurers on the market are actually underpricing the risk to try and draw in the customers. That’s the reason why there have been 2 major insurers suffer huge losses and now RSA announcing their profits are massively down.
Remember when the claim process was simplified at the behest of insurance companies
One of the benefits was to be lower insurance premiums, that lie didnt last too long
Read the article , the parent company has injected capital in to RSA in Ireland, therefore it sounds like a solvency issue had arisen ie not enough reserves in place . They stepped in to solve it , unfortunately it appears that there has been some mismanagement here.
Serious mismanagement!
So tell me, what’s the issue, that 3 employee were suspended, or that there won’t be much of a profit, or 3 employees caused the profit problem, or what? Why is this news? Will they go bust?
The solvency issue could be the tip of this story
Quinn family will be proven right yet!! Corruption at top level in this country is septic Government included.
Ah will ya feck off with that. The fact that another insurance company exec board were doing dodgy things does not make Sean Quinn right. Cop on.
First of all what the Quinns did was totally wrong, but when Quinn insurance was taken and sold it was in a lot better place than RSA, Quinn situation was used to cover up 20 years of corruption by both banks and government. Has any person from government or banks been taken to task? No all they got were golden hand shakes and pensions for life.
Agree
Quinn Insurance was in a better position than RSA??? How exactly can you make such an claim?
I really do not want to get into a argument about Quinn (because it’s as bad as what happened in Saipan…) but RSA is a worldwide company with an Irish subsidiary in which a solvency issue was identified. The parent company plugged the balance sheet of the Irish subsidiary straight away when the issue was fully accounted for.
Quinn used Quinn insurance as a personal chequebook to make bets on the market. He’s a tit!
The article clearly states that RSA is now at 200% liquidity. Anyway, you said the Quinn family would be proved right … About what? And, how on earth did the Government use Quinn insurance to cover up the banks?
Then why did they suspend the claims director….
Unless they were deliberately underestimating the reserves…
There might be some form there.
Good question Patrick.
It says that profits were 70 million lower than the market expected. Problem is that the share price was based on the higher profit number, and will now fall quite a bit. That’s probably why the execs were suspended – possible fraudulent reporting of financial data
They paid 60 million for 123.ie ? Last week announced big rise in policy prices to recoup losses ….sinking ship
How come the Central Bank did not spot this? More blind eye from the regulators no doubt.
One day after the IMF leave the messing has already started.
Do what we alway do get the tax payer to fix it
The tax payer is not involved. The company is not insolvent, it is a UK public company, not an Irish one.
There is something wrong with this article.
A smaller profit is still a profit, and what the reduction should only affect is the annual dividend payout.
To use it as an excuse to inject funds doesn’t add up, and places a serious question over the viability of the outfit.
It sounds like just the beginning of the story
They injected funds because the Irish operation fell below the required Central Bank solvency levels. It was necessary.
The annual dividend is from the UK parent, not the Irish company. So far, the UK parent has acted pretty smartly. Because they are public (and not Irish!), the outcome will be known very soon. Note they are not asking their Irish exectuives to carry out the enquiry!
I’m currently waiting for my dogs vetenary bills to be paid by RSA!!!!
To make matters worse I have my car & home insured with 123.ie…
Another engineered scam to up the Ante in favour of the schoolyard bullies. More gravy. Via the servants’ entrance. Call it backdoor tax. No lube.
I’m currently waiting for a claim to be paid by RSA for my dogs vetinary bills, also to make matters worse I have my house & car insured with 123.ie too …
Veterinary
Heading towards my third renewal with 123.ie, no claims, and they outrageously quoted me double my previous of ~€610.. ‘That’s the best our broker can do for you, all premiums are going up this year’, I was told.. ‘That’s fantastic’, I replied..
RSA bought the 123.ie book of business. That was their first mistake.
The 123.ie claims are under reserved. It was exposed in an independent audit.
Not sure whether the under reserving was a legacy issue or lack of attention to reserving on the whole book of business since it was purchased. Think it was PWC identified it.
I don’t think there’s anything deliberately shady in it, negligent maybe, but people should be careful about making comparisons to Quinn.
If true, I wonder if CAB is going to make some repossessions?
RSA are the main sponsor of the Irish Cricket team and of Leinster Cricket, they’ve been part of the reason Cricket Ireland have been able to offer central contacts to players and professionalise the sport here.
Got my renewal last week and without a claim, they increased my car insurance by €617. Had a look today again, it’s only up €64. What’s going on at 123, seriously? 123 dot i e just log on and lose money?
My sister found the same recently, and was amazed. She got a much better quote elsewhere.
Wouldn’t deal with Rsa again, if you have a genuine claim and need the money , they stall, stall, stall…
Do they have Tesco car insurance.ie as well? I think they do, I’m having problems with them at moment :(
Tesco car insurance is underwritten by RSA
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