RSA Insurance Group, the subject of an abandoned takeover bid by Zurich Insurance Group, said operating profit rose 43 per cent last year after record underwriting profits.
Operating profit climbed to £523 million from £365 million a year ago, the London-based insurer said in a statement on Thursday.
Group underwriting profit rose to £220 million from £41 million year earlier.
"We are today increasing our annual gross cost savings target to over 350 million pounds by 2018 and raising our underlying return on tangible equity expectation to the upper half of our 12 to 15 percent target range by 2017 with further improvement to come thereafter," chief executive officer Stephen Hester said in the statement.
“We expect challenging markets and to rely on self-help to progress. “ RSA received a £5.6 billion offer from Zurich Insurance in August.
RSA’s Irish premiums fell by 4 per cent on a constant currency basis to £261 million.
Its Irish underwriting loss of £35m million in 2015 compares with a £108 million loss in 2014.
The stock slumped when the Swiss firm was forced to walk away from the deal after reporting losses at its own general insurance unit.
A takeover would have capped a tumultuous two-year period for RSA, after an accounting scandal in Ireland led to Simon Lee’s departure as CEO, a stock sale and a spate of asset disposals.
Mr Hester, hired in 2014 to clean up RSA’s balance sheet, said in September he expects the company could attract more suitors.
The company announced the sale of its entire 75 per cent stake in RSA Russia to Blagosostoyanie in December. Group net written premiums fell 3 per cent last year to £6.8 billion, RSA said.
The insurer plans to pay an final dividend of 7 pence per share after it reinstated payouts with an interim dividend of 3.5 pence per share in August.
The shares have declined 7.5 percent in London this year, valuing the company at about £4 billion.
Mr Hester said a British exit from the European Union could have a negative impact on the insurer’s business and investment returns, underscoring a warning from top executives about the impact of withdrawal.
Mr Hester was one of 36 CEOs of companies in the blue chip FTSE 100 index who this week signed an open letter saying that leaving the EU would put the British economy at risk, though some Brexit proponents seized on the lack of other CEO names from the list.
“Half of our market value comes from our European businesses, and in all of our markets, some of our major competitors are European,” Hester said. “A level playing field between European competitors and ourselves is valuable to us in the long run.”
Meanwhile, property investors have warned that the UK would be a less attractive place to invest were it to leave the European Union, according to a new survey by global property adviser CBRE.
The proportion of respondents who think the UK would be a slightly worse place to invest has risen from 32 per cent in 2014 to 46 per cent in the latest survey, bringing the total that think the UK would be a worse place to invest to 73 per cent, up from 69 per cent last year.
CBRE Ireland head of research Marie Hunt said most of the commercial real firm’s Irish clients suspect that an exit is unlikely. She said some view it as potentially positive for Dublin as the only other English-speaking base within the EU on the basis that it might attract some occupiers to relocate to the Irish capital.
Bloomberg
