DUBLIN: Underwriting losses at insurance firm RSA Ireland came in at £107m (€146.9m) last year as the insurer experienced another difficult year in the Irish market.
RSA’s Irish operations acted as a significant drag on its overall business with its UK, Canadian and Scandinavian segments returning underwriting profits for 2014.
Group operating profit was £365m — up from £349m in 2013 — while group underwriting profit was £90m.
RSA Ireland’s loss was broken down into £62m current year loss and a prior year loss of £45m while the cost of remediation, reserve strengthening and the level of required underwriting improvement was greater than first expected at the start of the year.
The current year loss reflects the ongoing impact of issues identified in 2013, in particular inadequate pricing on pre-remediation business that came through in earned premiums.
Prior year losses were a combination of updated reserving judgements from 2013 and specific factors including the impact of lower discount rates following a High Court ruling in December.
The insurer also introduced large premium hikes of 25% on motor and approximately 15% on liability insurance during 2014.
Last year saw RSA Ireland write-down £44m relating to goodwill and £17m in relation to software and customer lists. This leaves £48m of goodwill and intangible assets in the Irish business.Additionally, the firm has written down its deferred tax asset by £8m leaving a remaining tax asset of £5m.
RSA’s goal is to return the business to profitability in 2016 through underwriting improvement and cost reduction, it said.
A new executive management team has also been installed of late with a new chief financial officer; chief operations officer and chief underwriting officer joining Ken Norgrove who was appointed as the insurer’s new CEO last March.
Last month, RSA Ireland’s former chief executive, Philip Smith took a constructive dismissal case against his previous employer.
Mr Smith resigned in November 2013 during an investigation into the Irish business’s accounting practices, saying he was being made a “fall guy”.
