Stephen Hester, the former head of the Royal Bank of Scotland, has said that he is planning to launch a giant fundraising effort in an effort to revive RSA.

He took over the troubled insurer RSA this month and is aiming to revive its business. Hester is now expected to scrap the dividend as analysts said that the insurer is expected to record a fall in pre-tax profitsto about £130 million compared to £479 million in 2012. RSA, which has been hit by a string of profit warnings, had cut its rim dividend in August and is now expected to scrap the entire dividend for the year. It is believed that the insurer might be seeking to raise as much as £800 million.

Mr Hester is joining the insurance major at a time when the company is required to clean up its Irish business. Barclays has also upgraded the shares of the company following the appointment of Mr. Hester as he is expected to revive the business of the company. Simon Lee had stepped down from the top job due to scandal involving the company's unit in Ireland.

Mr Hester succeeded Simon Lee, who resigned in December after the London-based insurer injected £200 million into its Irish business due to an accounting investigation. The RSA has completed a review of its Irish business and its reserves and has set aside premium income to cover possible future insurance claims. Experts have said that the fresh capital investment into RSA Ireland will affect its profitability.

A spokeswoman said: "RSA is considering measures to strengthen its balance sheet, including raising capital by way of a rights issue. However, no final decision has been made by the company. Further details will be given when appropriate."