Trading results
- Tangible equity up 74% to £2.9bn (31 December 2013: £1.7bn).
- Net written premiums of £7.5bn down 8%1 (down 2% underlying2) reflecting disposals, our portfolio action plan and competitive market conditions.
- Foreign exchange movements, notably the weakening of key currencies against Sterling, translated reported premiums down 14%.
- Group operating profit was £365m (2013: £349m) with core business operating profit of £367m up 17% from 2013 £315m). Scandinavia £251m; Canada £107m; and UK £147m.
- Headline Group underwriting profit was £90m (2013: £57m), comprising strong current year results reduced by losses in Ireland and UK charges for prior year reserve strengthening. The combined ratio3 was 98.8% (2013: 99.4%).
- Current year core business underwriting profit improved sharply to a record £190m excluding Ireland (2013: £97m); underlying current year loss ratio of 56.2%, 1.0pts better than prior year (2013: 57.2%).
- Prior year underwriting loss was £31m. Excluding Ireland and non-core operations, prior year profit was £25m (2013: £150m profit ex Ireland). This reflected various adjustments, particularly reserve additions in the UK, but also the unsustainable level of past reserve releases.
- Ireland underwriting loss of £107m as remediation continued. Our goal is to return Ireland to underwriting profitability in 2016 with significant loss reduction in 2015.
- Net gains of £476m include £342m from completed disposals. Gains were partly offset by £405m charges including £99m write down of goodwill and intangibles and £73m redundancy costs.
- Pre-tax profit was £275m (2013: £244m loss). Post tax profit of £76m (2013: £338m loss) after tax charge that included a deferred tax asset write down of £92m.
- Capital metrics at 31 December 2014: IGD surplus c.£1.8bn with coverage of 2.2 times; ECA surplus c.£0.9bn with coverage of 1.3 times.
- Reserve margin for the core Group is unchanged at 5% of booked reserves.
- Return on tangible equity 3.6% (2013: (16.7)%). Underlying return on tangible equity4 of 9.7% (2013: 6.9%).
- Dividend payments are proposed to recommence with a final dividend recommendation of 2p per ordinary share.
