Royal & Sun profits rise by 79%

Royal & Sun Alliance (RSA), the insurer that has more than 400,000 customers in the Republic, yesterday posted a 79 per cent increase in first-half profits.

The performance, which was at the top end of forecasts, was underpinned by gains in its UK commercial property and Scandinavian business.

The company did not break out results for its operations in the Republic, where it claims to a 17 per cent share of the non-life business outside of motor insurance.

RSA said however that its core businesses were all enjoying strong returns despite tough conditions in some markets. It also said that its US insurance business was progressing well.

RSA's operating profit in the six months to June 30 rose to £329 million (€478 million) from £184 million a year ago.

Barclays analyst Richard Schreuder said RSA chief executive, Andy Haste, had done well to restructure the company and address a number of balance sheet issues, including the pension fund deficit.

RSA said the combined ratio across its operations had improved to 92 per cent from 93.2 per cent a year ago. The combined ratio is a key measure of underwriting profitability and a figure under 100 per cent represents a profit.

The company said it had net written premiums of £2.9 billion, compared with £2.5 billion in the same period a year ago.

Dutch insurer Aegon, which has a small operation in Dublin's International Financial Services Centre (IFSC), has meanwhile reported a better-than-expected 71 per cent rise in second-quarter net income. The growth was driven by an interest rate derivative gain, with analysts also citing strong underlying sales growth.

Net income was €760 million over the quarter. Comparisons with the same period of 2004, when net income was €444 million, were complicated by restatement under new International Financial Reporting Standards accounting rules.

Like RSA, the company, which operates in the IFSC through Scottish Equitable International, did not break out its Irish performance.