The U.K.’s Royal & Sun Alliance Group issued a brief statement that CEO Bob Mendelsohn had resigned from his position and as a Director of the company effective immediately.
The news was not unexpected. Rumors have circulated since the beginning of August that Mendelsohn, the architect of R&SA’s decision to sell off some $1.25 billion worth of “non-core assets” in order to concentrate on its property/casualty activities, was on his way out. The restructuring has had mixed results, and a spate of recent bad news apparently led the Board of Directors to the decision that a change was necessary.
R&SA recently announced a £319 million ($495 million) loss (due in part to WTC and asbestos related claims); it plans to cut 1200 jobs and has lowered its dividend payment (See IJ Website August 21 and 28). Moody’s Investors Service is considering a down grade in its ratings. (See IJ Website Aug.19), and Standard & Poor’s and A.M. Best have already done so.
A BBC report strongly indicates that mendelsohn was pushed out. The article quotes R&SA Chairman Sir Patrick Gillam as stating that, ” “Bob Mendelsohn has led the Group through difficult times for the insurance industry; however, in order to exploit the work done to date it is the Board’s view that the interests of the Group will be best served by a change in the top management.”
R&SA’s Group COO Bob Gunn will, who previously headed its Canadian operations, will take over as temporary CEO until a permanent replacement for Mendelsohn can be found. The company said it was actively considering several candidates, and did not rule out bringing in an outsider as its new head.
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