RSA appoints former RBS boss Stephen Hester as new CEO

5th Feb 2014 09:25

Stephen Hester, the former frontman of RBS credited with helping to turn-around the bank after the financial crisis, is to become the boss at RSA Insurance, giving the stock a big boost on Wednesday morning.The appointment, announced late on Tuesday evening, will see Hester "immediately" begin a review into operations following a tough few months for the troubled insurance business.RSA let a number of senior executives go late last year after finding "financial and claims irregularities" at its Irish division.These issues led to £200m of losses within RSA Insurance Ireland and prompted group Chief Executive Officer (CEO) Simon Lee to resign in December.Hester, who has been named as CEO with immediate effect, said in a statement that RSA has "not lived up to our stakeholders' expectations and performed to our true potential"."I look forward to getting started immediately and working closely with the board on the business review to ensure that we are able to deliver strength and value to all of our stakeholders and re-emerge as an attractive solidly performing group," he said.The company assured that the boardroom change has not affected the outcome of the current business review, which remains on track to be presented at its full-year results on February 27th.Martin Scicluna, RSA's Chairman who had been acting in an executive capacity since Lee's departure, is to revert to the Non-Executive Chairman position.Investors celebrated the news on Wednesday with RSA's share price trading 6.2% higher at 105.1p by 09:40.Analyst Andreas van Embden from JPMorgan said this is a "welcome and timely appointment ahead of the pending strategic reorientation of the insurance group"."Overall, a smooth execution of the final outcome of the strategic review has now become more likely given Mr Hester's background and experience," he said.BC