Stephen Hester, the former chief executive of bailed-out lender Royal Bank of Scotland, has been appointed CEO of troubled U.K. insurer RSA.
Hester takes up the new role immediately, replacing Simon Lee, who quit in December after accounting irregularities at RSA's Irish arm and weather-related claims forced the group to issue three profit warnings within six weeks.
In today’s statement, RSA said its Chairman Martin Scicluna – who has held the role on an interim basis since Lee departed following a run of profit warnings and a probe into accounting issues at RSA's Irish arm – will return to his usual role.
In January, a PricewaterhouseCoopers probe confirmed financial irregularities and “inappropriate collaboration” by managers at RSA Ireland, leading to the dismissal of that country’s chief financial officer and claims director.
RSA Ireland chief financial officer Rory O’Connor and claims director Peter Burke were dismissed “for their roles in relation to large loss and claims accounting irregularities,” according to a statement from the London-based insurer.
The British insurer has placed the blame for £72 million (Cdn$128.4 million) of losses on a “small number of senior executives” in Ireland after the PwC review into financial irregularities confirmed inappropriate collaboration among managers. (continued.)
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It also reported an additional £128 million (Cdn$228.8 million) of losses in reserves at the Irish business due to what it described as “adverse bodily injury claims trends” in 2013 and previous years.
Hester left state-backed RBS last June after the bank's board, pushed by Britain's finance ministry, decided it needed new leadership to prepare it for an eventual return to private ownership.
RSA shares rose more than 2 percent in response to Hester's appointment.
