YEAR END RESULTS 2011
Good year for the Group on both the top and bottom line
- Net written premiums of £8.1bn, up 9% (8% at constant exchange)
- Underwriting result of £375m, up 58% and a combined operating ratio (COR) of 94.9%
- Investment result of £642m, up 19% driven by gains following action to reduce equity exposure
- Operating profit of £884m, up 38% and profit before tax of £613m, up 29%
- IGD surplus of £1.3bn, coverage remains strong at 2.0 times
Continued strong operating performance in 2012 despite ongoing market and economic challenges
- Expect to deliver good premium growth and a COR of better than 95%
- Profitability will remain strong in Scandinavia, Canada and Ireland; driving improved UK underwriting performance; Italian remediation remains a priority
- Investment income to be around £500m, reflecting the ongoing gap between maturing and reinvestment yields
Confident of delivering sustained outperformance at both local and Group level
- Fundamental strengths unchanged; retain non-life bias with rigorous focus on underwriting discipline and control
- Strong and diversified portfolio combines leading positions in competitive UK market, strong operations in Scandinavia and Canada, consistent outperformance in Ireland, and fast growing Emerging Markets
- Overseas operations to constitute a greater share of Group premiums – current target is c70% by the end of 2015; now expect to be close to this in 2014 and move beyond 70% in subsequent years
- Reposition UK as a more targeted and focused business, which delivers improved and sustained profitability
- M&A focus will be on bolt-on deals
Continued growth in dividend
- Prudent to grow the dividend at more modest levels, reflecting the impact of low yields
- Recommended final dividend up by 2% to 5.82p, full year dividend of 9.16p
- Strongly placed to return to a higher level of dividend growth as market and economic conditions improve
