Feb. 24 (Bloomberg) -- RSA Insurance Group Plc is considering a rights offering to replenish capital following a scandal at its Irish unit and losses related to flooding in towns along the River Thames and southwest England.
A share sale is one of a number of measures being considered and no final decision has been taken, the London- based insurer said in an e-mailed statement yesterday. The company may seek to raise as much as 800 million pounds ($1.33 billion), the Sunday Times reported.
RSA this month named the former head of Royal Bank of Scotland Group Plc, Stephen Hester, as chief executive officer as the insurer seeks to strengthen its finances after injecting 200 million pounds into its Irish unit. The company is also planning the sale of assets in central and eastern Europe, three people with knowledge of the matter said on Jan. 23.
RSA, which provides home and car insurance, and U.K. competitors Aviva Plc and Direct Line Group Plc are poised to bear the brunt of losses from damaged caused by storms that have saturated the ground and battered coastlines since December, analysts at Goldman Sachs Group Inc. said on Feb. 21. Insured costs may reach as much as 1 billion pounds by April, according to Deloitte LLP.
RSA has declined about 14 percent in the past 12 months in London trading, giving the company a market value of 3.73 billion pounds.
The insurer will cancel its 2013 dividend payment as part of the plan to bolster capital, the Sunday Telegraph reported yesterday. The company is scheduled to report full-year results on Feb. 27.
Hester succeeded Simon Lee, who quit after injecting a second round of capital into its Irish business amid an accounting probe into the unit. The head of the Irish business, Philip Smith, resigned in November.
--Editors: Jon Menon, James Amott