The former chief executive of Royal Bank of Scotland has been handed the task of salvaging RSA's reputation following the discovery of a £200m black hole in the FTSE 100 insurer's accounts last year.
Stephen Hester will join RSA with immediate effect and pick up an annual salary of £950,000. His appointment as chief executive comes just months after he was ousted from the state-owned bank last June with a £5.6m pay-off.
"He is an exceptional business leader with extensive global financial services expertise," Martin Scicluna, RSA's chairman, said. "He has an outstanding track record of transforming the performance of businesses, bringing new energy and focus and implementing a challenging agenda to ensure significant value is delivered for customers and shareholders."
Under the leadership of its former chief executive, Andy Haste, RSA gained a reputation as one of the most reliable companies on the London Stock Exchange.
However, the group did not fare as well under his successor Simon Lee, who took over from Mr Haste in 2011 but left the insurer in December following its third profits warning in six weeks. RSA was later forced to fire two executives in Ireland after the accountants PricewaterhouseCoopers found that "inappropriate collaboration" between its subsidiary's top bosses had undermined accounting controls.
Analysts now expect the group to cut or scrap its dividend when it reports full-year results on 27 February. It will also outline the terms of a strategic review that could lead to the sale of its units in Canada, Latin America or Scandinavia.
Mr Hester, who is well-respected in the Square Mile after taking over at RBS at the height of its troubles during the financial crisis, said: "The challenges of recent months have demonstrated that we [RSA] have not lived up to our stakeholders' expectations and performed to our true potential.
"We have an obligation to deliver shareholder value and excellent products and services that provide everyday protection for our customers.
"I look forward to getting started immediately and working closely with the board on the business review."
The news was welcomed by investors in the group and is likely to boost RSA shares when trading begins this morning.
One shareholder, Chris White, the head of UK Equities at Premier Asset Management, told The Independent: "The appointment of Stephen Hester is a bit of a coup for RSA.
"After a string of profit warnings, investors will take some reassurance from the company's ability to attract such a big name to the post."