RSA Insurance Group Plc Chief Executive Officer Simon Lee quit after warning for the third time in six weeks that profit will be lower as the insurer injected more capital into Ireland amid an accounting probe.

The stock tumbled the most in 11 years after an additional 135 million-pound ($220.64 million) injection into the Irish unit placed the company’s dividend in jeopardy. Chairman Martin Scicluna will lead the U.K.’s biggest non-life insurer until a new CEO is named, London-based RSA said in a statement today.

“Profit warnings tend to come in threes and that’s proved to be the case for RSA,” said Barrie Cornes, a London-based analyst at Panmure Gordon & Co. in a note to clients as he reiterated a sell rating. “The 2013 final dividend will almost certainly be cut.”

RSA is injecting capital into the Irish business after it identified last month that its reserves weren’t sufficient to cover rising bodily injury claims. It also suspended the unit’s top three executives after an investigation uncovered irregular accounting, which prompted an initial 70 million-pound capital injection that reduced profit.

RSA said it now expects a “mid-single digit” return on equity, a measure of profitability, for 2013 as it also took an extra 25 million pound hit from last week’s storms across the U.K. and northern Europe. The company on Nov. 5 said that ROE would miss its 10 percent target following the windstorms that hit the continent in October.

Second Cut?

A dividend cut would be the second for the company in a year after RSA surprised investors in February by reducing its payout by 33 percent. It had the fourth-highest dividend yield among Britain’s biggest 100 companies at Nov. 29, according to data compiled by Bloomberg.

Lee, 52, won’t receive additional compensation beyond his contractual entitlement, RSA said. He succeeded Andy Haste as CEO in 2011 after running the company’s international unit, helping to turn it into RSA’s biggest division by revenue with acquisitions in Ireland and Scandinavia.

Scicluna said the company will start a full review of the group’s businesses, to help strengthen capital, with the outcome to be announced in February. RSA currently operates in 32 countries across Europe, Asia, Latin America, Canada and has made more than 60 acquisitions in eight years.

“The significant reserve strengthening in Ireland represents a further negative event and places additional strain on the capital metrics,” Scicluna said in a statement. “The impact of this reserve strengthening, alongside the extreme weather in 2013 and the effect of financial irregularities in Ireland will be taken into consideration in the board’s dividend decision in February.”

Shares Tumble

The stock tumbled as much 22 percent in London trading, the most since August 2002 and was down 18 percent to 82.05 pence at 11:27 a.m. in London. The stock has declined 35 percent this year wiping more than 1.6 billion pounds off the company’s market value.

RSA Ireland CEO Philip Smith resigned last month amid an ongoing investigation into whether the Irish unit reported the amount of premiums paid to the company earlier than it should have and the timing of when it set aside reserves to cover insurance claims. Chief Financial Officer Rory O’Connor and claims director Peter Burke remain suspended.

Ireland’s central bank, which first identified concerns over RSA’s local unit in August, said it remains “in close and regular dialogue” with the company.

The company has also hired PricewaterhouseCoopers LLP to report on oversight and controls at the unit with the results expected in January.

Ireland Woes

RSA’s woes come three-and-a-half years after Ireland’s central bank appointed administrators to Quinn Insurance Ltd. amid concerns about the company’s solvency. The rescue of the insurer, established in 1996 by now-bankrupt Cavan-based businessman Sean Quinn, may cost the country’s Insurance Compensation Fund as much as 1.65 billion euros, according to the central bank.

Irish taxpayers have also committed a gross 64 billion euros to the nation’s banking system to prevent it from collapsing in the wake of a real-estate market implosion in 2008. The bailout bill forced the country into a three-year international bailout, which is set to end on Dec. 15.

–With assistance from Gavin Finch in London and Joe Brennan in Dublin. Editors: Jon Menon, Keith Campbell