Insurer also alleges Philip Smith presided over ‘catastrophic level of under-reserving’
RSA has hit back at former Ireland chief executive Philip Smith, accusing him of fostering a culture of fear at the Irish division that prevented whistle-blowing.
The insurer also alleged at Smith’s unfair dismissal hearing yesterday that Smith had presided over a “catastrophic level of under-reserving”.
Smith denied both allegations.
RSA’s accusations follow Smith’s allegations in the first day of the hearing on Monday that the insurer had raided the Irish division’s reserves to prop up group performance.
Smith left RSA in November 2013 after the company discovered accounting and reserving problems at the Irish division.
The Irish Times reported that RSA counsel Brian O’Moore read out testimony from Smith’s former senior colleagues, which portrayed him as charismatic but tough to work for.
According to the testimony one colleague said “He was a great leader but you didn’t mess with Philip”. Others described public “floggings” and a tension when Smith was in a bad mood.
But the paper added that Smith denied that he was someone to be scared of. It quoted him as saying the reports were “an attempt at a complete destruction of my reputation” and that he was “a very positive people person”.
RSA’s O’Moore also quoted from a draft report from an RSA internal probe into the Irish unit’s accounting and reserving problems, saying that Smith authorised a “catastrophic level of under-reserving”, Reuters reported.
According to O’Moore, the draft report said the Irish division’s large claim reserves were consistently under-reserved by €10m (£7m) between 2008 and 2013.
O’Moore also quoted internal auditors as saying that informal processes to set reserves were contrary to a number of company policies.
Reuters quoted Smith as saying that he didn’t have an “intimate knowledge” of all the policies. The newswire also said Smith disagreed with O’Moore’s assertion that there was a “catastrophic” level of under-reserving.