RSA to slash global costs by £150m

RSA is set to cut global costs by £150m over the next three years, the Financial Times reports.

But the paper said some investors say this is not going far enough to achieve the improved profitability required.

Investors said new chief executive Stephen Hester will be looking to staff redundancies, lower commission rates for brokers and improved technological efficiencies to achieve the savings.

However, the Financial Times reported that sources close to the matter said RSA’s second largest shareholder, Cevian, was calling on the insurer to do more to control costs and improve profitability.

Irish problems

The move comes ahead of the announcement of RSA’s half-year results next month, which is expected to have a goodwill write-down for Ireland for as much as £70m as a result of the accounting scandal that rocked the insurer.

RSA is also expected to continue its policy since the accounting irregularities came to light of not paying a dividend.

The Central Bank of Ireland could fine RSA as much as £35m for the incident, but the fine issued to the insurer is expected to be lower than this.