Chaucer plans to raise £39m by selling shares through placings and open offers.
Investors will be able to buy two new shares for every three they already hold and will also have the chance to buy 19 units of loan stock for every 88 shares they currently hold.
The new shares will go on sale at 30.75p each.
The company's existing stock was trading 33.5p this morning having been stable for the last four days.
The new shares have been conditionally placed with institutional investors.
Managing director Ewen Gilmour said the deal would enable Chaucer to take advantage of high prices for insurance and reinsurance.
