Mixed fortunes as insurance giants reveal pre-tax profits

CGNU is counting the cost of last autumn's torrential rain, which is expected to hit its pre-tax profits.

Appalling weather across Europe may also have had an effect on fellow insurance company Legal & General.

City forecasters expect Legal & General to unveil profits of £498m, showing a solid rather than spectacular sales performance, with the company keen to dispel rumours of margin weaknesses.

Shares in Legal & General have traded sideways since they joined forces with Barclays in January to sell life insurance and pensions through the bank's UK outlets.

It's hoped a similar agreement with the Alliance & Leicester could kick-start share prices.

CGNU has been forced to set aside £200m in provisions to cover the cost of last autumn's heavy rain.

It is expected to announce pre-tax profits of £1.43bn, and analysts are seeking an assurance that the proposed sale of the US property and casualty insurance operation is still on course.

Alex Scott, of Barclays Stockbrokers, says analysts are also calling for an update on CGNU's health management proposition.

He adds: "At these levels, the markets are not discounting much good news; the shares have slipped back and are near to buying territory".