The share value of Royal & Sun Alliance has jumped 4% after the UK insurance company delivered a blockbuster first quarter of results, highlighted by a 177% increase in after-tax profits.
London-based Royal & Sun reported increasing net profit for the first three months of the year by close to a factor of three as income improved from GBP44 million in Q1 2004 to GBP122 million in the last quarter.
The insurer said that the upturn in results was due to strong performances in its UK, Canadian and Scandinavian businesses coupled with effective restructuring, which the company says has saved it GBP200 million a year.
The impressive figures blew away analyst expectations and caused significant excitement on the investment market as shares increased by 3.74% to 76.25p.
Other highlights of the financial declaration were a doubling of operating profits to GBP160 million and a reduction of the insurer’s combined ratio from 94.2% to 91.2% despite costly payouts for January storm claims.
Andy Haste, group chief executive of Royal & Sun Alliance Insurance, commented: It has been a strong start to the year. Our net written premiums, operating result and profit after tax have all increased significantly over the last year and we’ve delivered good performances from each of our core businesses. Our results reflect the quality of the portfolio, the benefits of our operational improvement program and our focus on maintaining underwriting and claims disciplines.