‘Men wept and shook with fear talking about ex-RSA Insurance boss’

Executives at RSA Insurance’s Irish unit wept as they recalled how their former boss, Philip Smith, pressured them, an employment hearing heard.

“Men were weeping into their hands, crying,” Derek Walsh, RSA’s group counsel, said at an Employment Tribunal yesterday in Dublin, in relation to an internal probe into how the company handled the process of setting aside money for large claims.

“Men shaking with fear when they were talking, not about the reserving issue, not about the issue that was going to get them into trouble. But talking about why they had to do it,” he said. They were “talking about Mr Smith.”

Mr Walsh’s evidence came in the fourth day of Mr Smith’s constructive dismissal case. Mr Smith left RSA in 2013 as the company investigated accounting issues at the Irish unit. Mr Smith told the tribunal earlier this week an internal company report which effectively accused him of bullying amounted to “character assassination” and didn’t match reality.

Rory O’Connor, the former chief financial officer, said yesterday Mr Smith had been involved in fixing reserves for some large insurance claims below levels recommended by staff. Mr Smith has said this isn’t true.

Mr O’Connor, who left RSA after a probe found executives had made reports that were “inaccurate and potentially misleading,” said he has also filed an unfair dismissal case with the tribunal.

Mr O’Connor said while Mr Smith could “be charming and funny,” he was scared of him.

“He could be emotional and aggressive,” Mr O’Connor said at the hearing, adding that he had sought counseling while employed at RSA. “I felt that if I had whistle blown and had been unsuccessful my life could have been made very difficult” in finding another job.

Mr O’Connor said he accepted the insurer had “aggressive accounting policies and accounting errors” while he was CFO.

RSA is still awaiting the results of a regulatory probe and a £200m (€280m) capital injection in Ireland that also cost former group CEO Simon Lee his job. The Irish unit cost RSA another £100m in 2014.

Bloomberg