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 £286 million from £601 million a year earlier.
He scrapped the company's dividend and asked shareholders to stump up £775 million in a rights issue - equivalent to 20% of RSA's market value - in order to repair the insurer's balance sheet.
Loading article content
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 £75 million and £100 million.
This is on top of the £41 million 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 £36 million 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 £220 million, 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 £200 million 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 £2.9 million 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.
RSA shares were more than 3% lower today