Royal & Sun Alliance chief executive Bob Mendelsohn said he can't rule out a rights issue to fund growth in the company's general insurance business.
This year R&SA set itself a target of £800m of extra cash from disposals and discontinued business which was to be diverted into the insurance business.
There were concerns that RSA would not come close to that figure and a massive equity fundraiser would be needed. However, as of today R&SA has freed up £725m of capital.
"If 2003 growth is as strong as we think it may be then clearly we have to continue our capital raising exercise...to make sure shareholders get the full
benefit of that growth."
At 8.30 am, the shares were down 19% at 117 pence as
the spectre of the rights issue loomed and on the back of worse than expected full-year results.
R&SA said that provisions set aside to pay out for the victims of the Sept 11 World Trade Center attack would rise by £66m, taking the total to £275m.
Operating profit in the six months to June 30 fell to £301m from £367m a year earlier, including the WTC charge.
RSA said the strong performance of the general insurance business mitigated some of the sharp declines it encountered in the investment markets.
At the period-end, the company's combined operating ratio, which measures the performance of the insurance business, hit the company's target 103 pct as rates firmed from 104.3 pct a year ago.
