ANDY HASTE, the chief executive of Royal & SunAlliance, staked his reputation yesterday on his plan to turn around the stricken insurer.

Mr Haste, who took over in April, said yesterday he had “set out my stall” with the announcement that R&SA is to launch a deeply discounted rights issue and make yet more reserves for past-year losses.

He said he was committed to taking a prudent approach to past-year reserves, taking a hit of up to £800 million on to the balance sheet in the third quarter of this year. He said: “Prior-year developments have haunted us for a number of years.”

Mr Haste said that the purpose of the reserving was to allow the group to look forward and develop its business in the areas it believes will be profitable in the UK, Canada and Scandinavia.

He said: “I want to be able to do that without looking over my shoulder the whole time.”

But investors were incensed that R&SA was effectively tapping the market to compensate for its own poor reserving in previous years. The firm had already increased its reserves by almost £1 billion in 2002.

David Cumming, head of equities at Standard Life Investments, said: “The rights issue was expected but the scale of the reserve strengthening was a disappointment.”

Analysts said that any further reserve shocks would leave Mr Haste extremely exposed. Analysts said that he has gained credit so far for executing a recovery plan laid down by his predecessor, but would be held to task by investors if the group is forced into any more sudden announcements.

Alistair Smith, insurance analyst at Fox-Pitt Kelton, said: “He has bought himself some time. This should mean that we don’t get any nasty reserving surprises over the next few years.”

Mr Haste, formerly head of the UK business of AXA, the giant French insurer, took over at the start of April, seven months after Bob Mendelsohn was ousted for presiding over the decline of the insurer. During his tenure, shares collapsed from 808p to 120p.