R&SA Posts Strong 2006 Results

Unburdened from its U.S. subsidiaries (see related articles), the U.K.’s Royal & SunAlliance achieved strong financial results in 2006, with operating profits up 5 percent to £780 million ($1.5 billion).

Other earnings highlights reported by the Group included the following:
— Net written premiums of £5.5 billion [$10.63 billion] up 3 percent on 2005
— Combined operating ratio (COR) of 93.3 percent – 0.8 points better than last year
— Profit before disposals and pension scheme change up 11 percent to £650 million [$1.256 billion]
— Underlying return on equity of 21 percent
— Loss after tax of £20 million [$38.66 million] includes £499 million [$964.6 million] from the write down and trading loss of the US operation

R&SA also noted that it had largely delivered in its strategic objectives for 2006, notably shedding its U.S. subsidiary liabilities. The report listed the following accomplishments:
— Strong performance from each region – underwriting result up 18 percent to £310 million [$600 million]
— Driving profitable growth in our target markets – new business up 26 percent
— Ahead of target to deliver £130m expense savings by mid 2008
— US disposal complete – resolution of last remaining legacy issue
— US delisting and SEC deregistration complete

Group CEO Andy Haste commented: “It has been a good twelve months for the Group. We have achieved another strong performance with an 18 percent increase in the underwriting result and continued delivery against our strategic objectives.

“The completion of our US disposal resolves the Group’s last remaining legacy issue. Our portfolio of businesses is strong, we are growing profitably in our target trades and we are well positioned to continue delivering sustainable profitable performance. As it stands today, we expect the Group to deliver a combined operating ratio of better than 95 percent for 2007.

“As a reflection of our confidence in the earnings of the Group and our capital strength, we are announcing a 35 percent increase in the final dividend to 4.12 pence [around8 cents], bringing the total dividend for the year to 5.87 pence [11.35 cents] up 24 percent on 2005. We plan to grow future dividends at least in line with inflation.”

The complete report and additional information may be obtained on the Group’s web site at: www.royalsunalliance.com.