The share price of RSA Insurance Group is plummeting this morning (December 13th) after the chief executive of the company announced that he was standing down from the position.
Simon Lee revealed that he will be leaving the role with immediate effect as a result of the ongoing issues with the Irish branch of the firm.
It is only a few weeks since the chief executive of RSA Ireland Philip Smith and two other members of the management team were suspended, although the company did not give any details of the reasons for their departures at the time.
Group chief executive Simon Lee explained at the time that the issues would not affect the rest of the firm, although he revealed its operating results by as much as £70 million in 2013 as a result of the problems.
Profits to be hit
Mr Lee has now stepped down from his position, with RSA announcing in a statement that the unit's reserves will have to be strengthened by a further £130 million.
"This is in addition to the £70 million previously announced on November 8th relating to claims and finance issued in Ireland," the firm said in the statement.
Last week's storms in Europe are also expected to hit the group's earnings for this year, while strengthening its Irish reserves will have had an impact on its takings for 2013 as well.
RSA revealed that following the immediate departure of Mr Lee, Martin Scicluna would become executive chairman until a permanent replacement can be found. It said: "We now expect mid-single digit group return on equity in 2013."
On the back of the shock announcement, the share price of RSA collapsed in the early stages of morning trading. By 08:49 GMT, stocks were down by more than 16 per cent and they were still falling as the session continued. Shares were trading for 83.75, which is well down on the company's 52-week high of 137.30.
Find up to date information on the FTSE 100 and spread betting strategies at City Index