Royal & SunAlliance reports 32 percent hike in H1 profits

Royal & SunAlliance reports 32 percent hike in H1 profits

	Published : Thu, 10 Aug 2006 13:00 By : Cedric Benson Print this Story

LONDON - Britain's second-largest non-life insurer, Royal & Sun Alliance Insurance Group, has reported a 32 percent increase in its profits in the first half of the year buoyed by very good performance by its MoreThan brand in UK and foreign sales in Canada and Latin America along with cost cuts and ``favorable'' weather- related claims.

Pre-tax profits for the first two quarters were reported at £329 million up from £296 million in the same period last year. The net premium income rose by 2 percent to £2.83 billion. The group had chopped around 1,550 jobs in June 1000 of them in Britain alone, thereby aiming to reduce its annual costs by a further £130 million. Meanwhile Chief Executive Andy Haste reported that their target of £270 million in cost savings has been already achieved ahead of schedule.

Commenting on the group’s performance, Haste said, “We remain confident of delivering sustainable profitable performance. As it stands today we expect to come inside our full year guidance of a COR of around 95% for the Core Group.” He also said that business in UK was the most competitive but maintained that the group was on its way to recovery after posting 5 years of losses.

"The U.K. remains our most competitive market. The group remains committed to maintaining prices through underwriting discipline. It is building good momentum across the UK business. We will not chase volume at the expense of profit,” he added. Selling assets in US and making up for the claims related to workers compensation and asbestos-related illness has been paid off with the business in projecting a modest £6 million profit as compared to a massive £24 million and Haste is confident of breaking even at the end of the year. “We have a lot of confidence that going into the second half and next year that these results are sustainable,'' he added.