Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 5°C

ESTD 1874 Search

Insurance: RSA launches £775m rights issue following slump in profits

13:29 27 February 2014

RSA is to tap its shareholders following hefty weather claims and a slump in profits.

RSA is to tap its shareholders following hefty weather claims and a slump in profits.

Former RBS boss Stephen Hester launched a huge City fundraising today as part of his bid to revive More Than insurer RSA.


Mr Hester, who joined the company less than a month ago, revealed the extent of RSA’s current difficulties by announcing that operating profits for 2013 had slumped to £286million from £601m the previous year.

He scrapped the company’s dividend and asked shareholders to stump up £775m in a rights issue, equivalent to 20% of RSA’s market value, in order to repair the insurer’s balance sheet.

The company, which has operations in the UK, Scandinavia and Canada, has been hit by a series of profit warnings, an accounting scandal at its Irish subsidiary and a surge in flood claims following the wettest winter on record.

Mr Hester said: “RSA’s 2013 results are poor and we need to grasp the nettles of both underperformance and undercapitalisation.”

The recent weather has continued to hamper the company’s recovery plans, with flooding in the UK and Ireland and ice storms in Canada likely to result in a claims hit of between £75m and £100m.

This is on top of the £41m incurred by its UK and Europe division in the final quarter of last year, including from the impact of the Xaver storm.

In the UK, RSA made an underwriting profit of £36m as a result of a good performance in its property and household books, offset by losses in personal motor insurance.

In Ireland, the underwriting loss was £220m, reflecting the need for reserves strengthening and the impact of the irregularities within the Irish claims and finance functions.

RSA recently sought to draw a line under its Irish scandal after an independent investigation found “inappropriate collaboration” among the division’s managers led to a £200m black hole.

Mr Hester is being paid an annual salary of £950,000, with the potential for long-term incentive scheme shares worth up to £2.9m this year on top of a potential annual bonus.

He received praise for leading the rescue of RBS but left the state-backed lender at the end of September after five years at the helm. It was thought his departure followed a series of rows with Chancellor George Osborne.



Josh Eames and Ryan Scillitoe of Perrywood Garden Centre and Nurseries in Tiptree who have have raised more than £5,000 for charity through a 1,000-mile cyclinge challenge.

Josh Eames and Ryan Scillitoe from Perrywood Garden Centre and Nurseries in Tiptree have raised more than £5,000 for charity through a 1,000 mile cycle challenge.

The Leading Lives team receive their tropy at the Social Enterprise UK Awards in London.

Ipswich-based Leading Lives has been named Health and Social Care Social Enterprise of the Year at the Social Enterprise UK Awards.

The Hot Off The Press premises inTacket Stret, Ipswich, which the company has vacated after 25 years.

A printing company which has operated from the centre of Ipswich for 25 years has relocated – to a purpose-built log cabin in the owner’s garden.

Elaine and Nigel Bowen of Vanguard Communications.

Two businesses which receive support from Suffolk enterprise agency Menta have received Small Business Sunday awards from entrepreneur and former BBC Dragons’ Den star Theo Paphitis.

Wayne Seddon from The Bridge House in London receives his Adnams Pub of the Year award from chief operating officer Karen Hester.

Southwold-based Adnams has named The Bridge House, near London’s Tower Bridge, as its Pub of the Year.

Georgi Rollings, left, and Emma Lawrence of Starfish Accounting.

An Ipswich based provider of online company secretarial software has reached the landmark milestone of having 10,000 users.

Robert Hughes, managing director of Hughes Electrical, and Andy Yallop, store manager, at the company's new branch in Bury St Edmunds.

Hughes Electrical has opened the doors of its new store in Bury St Edmunds following a £200,000 investment which has also created six new jobs, doubling the size of its workforce in the town.

A file picture of the Sanofi factory in Haverhill.

More than 50 jobs are to be axed at the Haverhill site of pharmaceutical group Sanofi.

Barclays has been fined £72m by the Financial Conduct Authority.
Photo: Jonathan Brady/PA Wire

Banking giant Barclays has been fined £72million by the City watchdog for failing to handle potential financial crime risks relating to a £1.88billion transaction for ultra high-net-worth clients.

Ipswich council leader David Ellesmere at the former sugar beet factory site off Sproughton Road.

A new Enterprize Zone involving 10 development sites across East Anglia, with the potential to create 18,500 jobs, was announced by Chancellor George Osborne today.

Most read

Topic pages

Local business directory

Our trusted business finder

Property search

e.g. Oxford or NW3
Powered by Zoopla

Digital Edition

Read the East Anglian Daily Times e-edition today E-edition

Great British Life

Great British Life
MyDate24 MyPhotos24