Royal & Sun Alliance Group Plc., the U.K.’s second-largest general insurer, announced an operating profit of £140 million ($255 million), down from £226 million ($411 million) in 2002, a 38 percent drop.
The result was at the low end of analysts’ consensus forecasts. It indicates that for all of the company’s restructuring and capital increase through assets sales and a rights issue, orchestrated by CEO Andy Haste, R&SA is still struggling.
The principal reason for the decline came from reserve increases in connection with R&SA USA. Even though the company reduced its contingent liability estimates from £300 million ($546 million) to £200 million ($364 million), it still had to increase reserves by £96 million ($175 million) in the fourth quarter.
R&SA’s combined ratio, however, improved to 108 percent from 109.4 percent last year.
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