RSA Insurance Group has announced the completion of its review of Irish reserves referenced in the Group’s Interim Management Statement on 5th November. As a result, Irish reserves will need to be strengthened by £130m, the majority of which relates to bodily injury strengthening in motor and liability lines. This is in addition to the £70m previously announced on 8th November relating to claims and finance issues in Ireland.
The insurer intends to inject £135m of capital into RSA Insurance Ireland to ensure that the solvency ratio of RSA Insurance Ireland is maintained above 200%.
The PwC review of the issues raised in Ireland is ongoing and PwC is expected to report back to the Group Board in January when its findings will be announced.
RSA also experienced further adverse weather in early December with storms in the UK and Scandinavia leading to net claims of £25m for the Group.
The impact of this Irish reserve strengthening and the storms in Europe last week will lead to a further reduction in anticipated 2013 earnings. It now expects mid-single digit Group return on equity in 2013. The impact of events in the last quarter will need to be taken into consideration when the Board determines the 2013 final dividend recommendation in February.
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