(Reuters) — Troubled U.K. insurer RSA has sold the bulk of its eastern European operations to Poland's state-controlled group PZU for about €360 million ($497.3 million), the Polish firm's biggest ever deal and RSA's first to be done under its financial restructuring plan.

Announcing the sale of three Baltic businesses and one Polish operation on Thursday, RSA said more disposals could be on the way during 2014, as it seeks to boost its capital base by up to £1.6 billion ($2.7 billion) after it was hit by a series of weather-related claims and an accounting scandal at its Irish unit.

For PZU, central and eastern Europe's largest insurer, the deal taps just a fraction of its $3.3 billion cash pile, which had stood largely intact after previous attempts to score a big deal came to nothing.

Shares in RSA were up 2.1%, and PZU was up 2.6% and the STOXX Europe 600 Insurance Index was up 0.5%.

“I think it's a very positive disposal. They've achieved a higher level of proceeds than I think the market was expecting,” said Tom Dorner, analyst at Citigroup Inc.

Atif Latif, director of trading at Guardian Stockbrokers, also said the deal was good for RSA, valuing the units at above market estimates of 16 times 2013 pre-tax profit and 1.2 times premiums.

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RSA's new chief executive Stephen Hester said in a statement that the disposals were in line with its stated aim of focusing on core businesses in the UK & Ireland, Scandinavia, Canada and Latin America.

“The total sale proceeds represent significant progress against our overall target of at least 300 million pounds of disposal proceeds set for 2014. ... We will continue to evaluate further non-core disposals, some of which we expect to occur during 2014,” he added.

The deals with PZU will see the Polish firm take control of Lithuania's biggest insurer, Lietuvos Draudimas, Latvian rival AAS Balta, an Estonian unit of RSA's Danish insurer Codan Forsikring and Polish Link4.

Once all the sales are completed around £200 million ($334.6 million) will be added to RSA's tangible assets and will leave its central and eastern European unit with just a small business in Russia.

The Polish insurer, worth almost 12 billion zlotys ($3.96 billion) on the Warsaw bourse, said the deal strengthened its regional lead over Austria's Vienna Insurance Group and Italy's Generali , and would not deplete its capacity for paying dividends or funding further takeovers.