RSA rocked by Irish issues

Royal & Sun Alliance (RSA) insurance Group is off 11% after the company launched an investigation into its Irish business.

The stock is trading at 107p following the revelation that some ‘issues’ were uncovered during a routine internal audit in the company’s Irish ‘claims and finance function’ unit. PwC has been appointed to conduct a thorough and comprehensive appraisal of the operation. A number of members of the senior management team have been suspended while the investigation is carried out, including chief executive officer (CEO) Philip Smith, chief financial officer Rory O’Connor and claims director Peter Burke.

The group CEO, Simon Lee, stated that the company’s capital position ‘remains robust’ and the firm is still committed to its ‘dividend policy, which is aligned with market expectations’. RSA added ‘all our Irish businesses continue to operate as normal and policyholders will not be impacted’.

RSA has injected additional cash into the Irish unit to ensure it is meeting the 200% solvency ratio which is set by the Irish central bank. Investors tend to fear the worst in investigations of this type, but we could see the share price bounce back if it turns out that the Dublin-based operation is not in danger of collapsing.

RSA Insurance Group plc chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.