RSA set to announce new management team in days
Monday 16 December 2002
Royal & Sunalliance, the beleaguered insurer trying to plug a £600m shortfall in its finances, is within days of announcing the appointment of a new chief executive and a new chairman.
Sir Patrick Gillam, the insurer's chairman, is due to retire next year. RSA has also been without a chief executive since the board ousted Bob Mendelsohn in September after the group revealed a £319m loss. He lost the confidence of investors after failing to dispose of non-core assets quickly enough, leaving RSA facing huge losses and job cuts, and on the brink of a rights issue.
A programme of slimming the business is underway. But without a secure management team in place, the company has failed to regain the trust of the City and its share price is still languishing at 125p.
The candidate for the chief executive post is likely to be an American, after RSA's board found it difficult to find someone with the right experience to manage what will be a greatly reduced, property and casualty insurer.
Tom Fraser, the Australian former managing director of the UK operations of AMP, has most recently been linked to the group. But his lack of experience in property and casualty insurance meant his chances were slim.
Sir Patrick is under increasing pressure from the City to find a credible leader. The group's survival depends on meeting its £750m disposal strategy. However, bringing in another overseas chief executive may not find favour with investors as Mr Mendelsohn's brash management style sat uncomfortably with the City.
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