Comeback gathers pace; Half-year profits at R&SA soar by 79.

Byline: BY TONY McDONOUGH Deputy Business Editor

LIVERPOOL insurer Royal & Sun Alliance yesterday reported a 79% surge in half-year profits as its trading comeback gathered pace.

RSA said it was delivering on its strategy after unveiling group operating profits of pounds 329m in the six months to June 30 - up from pounds 145m a year ago.

This was at the top of the range expected by analysts, with net written premiums totalling pounds 2.9bn against pounds 2.5bn this time last year.

The company has its major UK base in Liverpool city centre, employing around 2,000 people.

Underwriting profits in the UK, where it owns the More Than brand and sells general insurance, were 61.2% higher than a year ago at pounds 79m.

Progress was achieved against all its key performance measures in the UK, with growth of 6% in written premiums for personal insurance and 5% for commercial cover.

The group has focused on its position as the UK's second-largest general insurer since selling its closed life assurance fund for pounds 850m last year.

Efforts to strengthen its balance sheet have included the closure of its final salary pension schemes, which was announced last week and will reduce the deficit in the fund by pounds 126m after tax.

RSA has also moved to reduce its exposure to risk in the United States where it recorded an underwriting loss of pounds 651m two years ago.

Chief executive Andy Haste said: 'It has been a good first half of the year, with strong performances from our core businesses and further progress in the US.

'We continue to deliver on our strategic objectives and the results demonstrate the underlying strength of the group and its ability to achieve sustainable returns In the UK, the company said its combined operating ratio (COR) - a key industry measure of profitability representing the amount of money spent paying out on claims and in costs for every pounds 1 of premiums taken - improved to 92.5% in the six months from 95.3% at the same stage of 2004.

COR was also stronger across all its global operations at 95.6% against 100.6% a year earlier.

Customers in the UK were showing more confidence in buying insurance online and this was underlined by the fact that the internet now accounts for 46% of all sales of More Than