Unaudited results - 3 months ended 31 March 2001

Richard Harvey, Group Chief Executive, commented:

“The Group has made a strong start to the year with record long-term savings new business and operating profits from ongoing business up 12% to £445 million.

“Our life achieved operating profit is up 13% underpinned by the record level of worldwide long-term savings new business at £3.7 billion. Record sales in the UK, up 22% to £2.2 billion, have been achieved with good margins. We are seeing the benefits of our increasing bancassurance distribution capability in Italy and Spain and continue to work closely with all our bancassurance partners to grow our long-term savings business aggressively and profitably.

“We are positioning the Group’s general insurance business to deliver sustainable profitability. We have achieved a 38% increase in operating profit, and are beginning to see the benefits of the actions we have taken to improve performance. The sale of our US general business remains on track and will conclude the major re-positioning of our general business portfolio announced at the time of the merger.

“Integration progress continues apace and we are on course to complete this process and realise the cost savings by the end of the year as planned. We are well placed to build on the progress achieved in the first three months of this year for further growth and increased shareholder returns.”

• Record level of worldwide long-term savings new business sales at £3.7 billion, 22% up in the UK
• Operating profit before tax from ongoing business* up 12% to £445 million (2000: £393 million). On a modified statutory basis, operating profit before tax was £310 million (2000: £298 million)
• New bancassurance ventures contributed to growth in life achieved operating profit, up 13% to £444 million
• Improving general insurance results, up 38% to £155 million
• Integration on course to complete by end of this year, £172 million of annualised savings achieved to date.

* Including life achieved operating profit and excluding results from US general insurance operations to be discontinued and the discontinued London Market operations.
All growth rates quoted are at constant rates of exchange.

Enquiries:

Richard Harvey, Group Chief Executive, Telephone +44 (0)20 7662 2286
Mike Biggs, Group Finance Director, Telephone +44 (0)20 7662 2031

Analysts:
Steve Riley, Investor Relations Director, Telephone +44 (0)20 7662 8115

Media:
Hayley Stimpson, Director of External Affairs, Telephone +44 (0)20 7662 7544
Alex Child-Villiers, Financial Dynamics, Telephone +44 (0)20 7269 7107

3 months results 2001 (detail) (PDF 168KB)