RSA considers rights offering to raise capital

RSA Insurance Group is considering raising capital by way of a rights issue following a £200 million fraud in the Irish unit and substantial losses related to flooding in the UK.

The company said in a statement that it is “considering measures to strengthen its balance sheet including raising capital by way of a rights issue”, but stressed that no decision had yet been made.

The insurer, which is due to release its end of year results on Thursday, named Stephen Hester – former Royal Bank of Scotland head – as its new CEO earlier this month, following the resignation of Simon Lee.

Lee left the company after injecting a second round of capital into its Irish business despite an accounting probe which later saw the resignation of the unit’s head, Philip Smith.

The group is also said to be ready to axe its dividend for 2013.