Insurer also looking to sell Canadian unit, according to reports

RSA is considering issuing £350m-worth of new shares to shore up its capital base, the Financial Times reports.

The move is intended to stave off a rights issue, where companies raise money by issuing shares at a discount to existing holders.

Accordng to the paper, RSA’s new chief executive Stephen Hester has approached top institutional investors to win their support or the share placement.

Separately, Sky News has reported that Hester is also sounding out potential buyers for its Canadian operation.

The sale could raise as much as £200m.

The company is looking to bolster its capital base after discovering accounting and reserving problems at its Irish operations.

The correction of the errors and reserve strengthening are expected to wipe £200m from RSA’s 2013 profit.

The problems have put RSA’s financial strength ratings at risk of downgrade.