Royal & Sun Alliance beats forecasts

More Than insurer Royal & Sun Alliance (R&SA) benefited from a healthy performance in the UK to beat market expectations for annual profits today.

The group unveiled a surplus of £698m (€1bn) for the year to December 31, against hopes in the City for a figure in the region of £643m (€935.5m).

The profits figure represented a sharp jump on the £258m (€375.4m) seen in 2004, when R&SA’s performance was dragged lower by underwriting losses in the United States.

The company said today it had taken further steps to derisk the business in the US, while overall it had been a “very good year” for the group.

R&SA described the UK market as competitive but said profits from underwriting motor and household insurance rose 70% on a year earlier to £39m (€56.7m).

The figure benefited from efficiency efforts and the increased use of the internet as the division’s combined operating ratio, the amount of money spent paying out on claims and in costs for every £1 (€1.50) of premiums taken in, improved by 1.7 percentage points to 95.6%.