Norwich Union Ireland has announced profits of £41.3 million (€52.4 million) last year, an increase of 104 per cent on 1997, and a significant contribution to the results of its parent company.

Its UK-based parent, Norwich Union Plc reported 11 per cent earnings growth and higher general insurance profits in 1998, a rarity in an otherwise depressed sector. Norwich posted operating earnings before tax of £716 million sterling (€1.06 billion), up 11 percent on a restated £644 million in 1997, as British life and pensions earnings rose 7.3 per cent to £486 million.

The 86,000 Irish shareholders in Norwich Union will benefit from an increased dividend of 9.73 pence per share, up from 9.31 pence. The dividend, which has a record date of April 23rd, will be paid on June 16th, 1999.

"It was a good year in both profit and growth terms," said Mr Vincent Sheridan, group chief executive of the Irish operations.

In Ireland, Norwich Union reported new business growth of 27 per cent in life and pensions while overall gross premium income increased by 18.5 per cent to £216.4 million. The company's main savings product, the Celebration Bond, took in £45 million last year and accounted for a significant portion of single premium sales of £97.6 million.

The profit from this division, or the gross balance on the technical account, surged by 128 per cent to £37 million.

The embedded value of the Irish life and pensions business increased by 9.1 per cent to £424.5 million. Embedded value is the measure used by analysts to compare insurance businesses. It measures the net 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, the company reported a 16.5 per cent increase in net written premiums to £75.4 million. The profit from these operations, excluding short-term fluctuations in investment returns, was up by 8 per cent to £4.3 million.

At the end of 1998, Norwich Union Ireland has funds of £2.8 billion under management.

After initially surging by more than 4 per cent to 465.25 pence sterling, Norwich Union shares closed at 452 pence in London yesterday, a gain of 5.25 pence on the day.