(Reuters)—RSA Insurance Group P.L.C.'s chief executive Simon Lee has quit after the insurer warned on profits for the third time in six weeks, prompting the chairman to initiate a review that could lead to the sale of part of the business.

RSA's troubles stem partly from accounting problems at its Irish business, which the insurer on Friday said needed another £130 million ($212.2 million) to plug a capital hole on top of the £70 million ($114.3 million) identified in November.

The resignation of Mr. Lee, who leaves with a one-year pay packet of £824,000 ($1.35 million), caps a difficult year for Britain's largest general insurer, which cut its dividend in February because of weak investment returns. It has underperformed its European peers, such as Aviva and Generali, this year by about 40%.

Chairman Martin Scicluna, who will take on an executive role until Mr. Lee is replaced, said the objective was to improve the capital strength of the group, which has been put under pressure by its Irish business. Accounting firm PWC is investigating allegations of irregularities and accounting issues and is due to report in January.

“In terms of disposals, we'll make whatever we need to make,” Mr. Scicluna told Reuters. He said he had not identified any particular businesses to be sold.

“As far as the group's portfolio is concerned, I'm not ruling anything in, I'm not ruling anything out.”

RSA will release results of the review with full-year earnings in late February.

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The group, which makes about two-thirds of its revenue outside Britain, has businesses in Scandinavia, Canada, Europe, Asia and the Middle East.

Analysts said RSA's emerging markets, Canadian and Scandinavian businesses were likely to attract interest from competitors if they are included in a disposal program.

“There is a good possibility that the business will come on the radar screens of predators looking to acquire some of its better performing business from what is likely to be a distressed seller,” Panmure Gordon said in a research note.

Shore Capital analyst Eamonn Flanagan said RSA's woes might even make the whole company a tempting takeover target. Italy's Generali recently denied any interest in its UK rival after press reports it was a possible bidder.

RSA said on Friday it had completed a review of RSA Insurance Ireland and would strengthen its reserves and inject £135 million ($220.4 million) of capital into the division.

That, combined with £25 million ($40.8 million) in claims from storms in Europe, would lead to a further reduction in anticipated 2013 earnings, the insurer said.

RSA said the latest problems would be reflected when it meets to discuss the 2013 final dividend. Ahead of this latest warning, analysts had predicted a full-year dividend of £0.618 per share, Thomson Reuters StarMine data showed.

RSA's shares dropped nearly 20% at one stage on Friday, their biggest daily fall since August 2002.

Mr. Scicluna said the group had started a search for a replacement for Mr. Lee but did not yet have a particular candidate in mind. Mr. Lee's resignation followed that of Irish business head Philip Smith last month after its problems surfaced.