Irish operation boosts profits at Norwich Union

Norwich Union Ireland has announced a 74 per cent increase in first-half pre-tax profits to £20.9 million (€26.5 million), benefiting from strong growth in its life, pensions and general insurance divisions.

The company said it had made a significant contribution to the interim results of its parent, British-based Norwich Union plc, which reported a more modest rise of 5 per cent in its overall profits.

Norwich said it had pumped £600 million in cash into acquisitions and new businesses over the last 12 months and this had restrained group profit growth in the short term.

The company's 86,000 Irish shareholders will be entitled to a dividend of 5.49 pence per share, based on the sterling/pound exchange rate on August 2nd. The dividend, an increase of 13 per cent on last year's interim payout, will be paid on December 15th.

In the Republic, Norwich Union said it had enjoyed an excellent first half.

"All our business operations - life insurance, pensions, investment management and general insurance - continue to record strong and profitable growth," said Norwich Ireland chief executive, Mr Vincent Sheridan.

The company's life and pensions division accounted for the lion's share of profits, reporting a 72 per cent increase in insurance profit before tax to £18.6 million.

Gross premiums rose by 36 per cent to £139.6 million while new business premiums rose by 31 per cent to £19.1 million.

The embedded value of the company's life and pensions business increased by 5 per cent to £447.3 million. Embedded value, a measure used to compare insurance businesses, measures the worth of the business in net assets as well as the value of future earnings from products already in the company's portfolio.

On the general insurance, or home and motor side, Norwich Union reported a 92 per cent increase in pre-tax profit to £2.3 million.

The division, which has a market share of around 5 per cent, posted a 15 per cent rise in premium income to £44.8 million.

In London, Norwich Union shares closed 1.35 per cent higher at 414 pence sterling.