The shares of RSA Insurance rose significantly after appointment of former Royal Bank of Scotland boss Stephen Hester as its new chief executive.

Mr Hester is joining the insurance major at a time when the company is required to clean up its Irish business. Barclays has also upgraded the shares of the company following the appointment of Mr. Hester as he is expected to revive the business of the company. Simon Lee had stepped down from the top job due to scandal involving the company's unit in Ireland.

Mr Hester succeeded Simon Lee, who resigned in December after the London-based insurer injected £200 million into its Irish business due to an accounting investigation. The RSA has completed a review of its Irish business and its reserves and has set aside premium income to cover possible future insurance claims. Experts have said that the fresh capital investment into RSA Ireland will affect its profitability.

The company has suspended Philip Smith, the chief executive of RSA Ireland, the chief finance officer Rory O'Connor and claims director Peter Burke pending investigations. RSA shares rose as much as 6.5 per cent yesterday morning.