Britannic defies doomsters

Insurance group Britannic has unveiled a smaller than expected dip in half-year profits, thanks to a late surge in new business.

The company said operating profits for the first six months of 2003 came in at £44m ($70m), down 15% compared with the same period last year, but comfortably ahead of the £38m forecast by City analysts.

The insurer said it had benefited from cost savings and stronger than expected levels of new businesses.

It said it had produced a "robust" set of results, despite "very tough market conditions".

Britannic also confirmed it would not be paying a dividend to shareholders, although it said it had the capacity, under normal circumstances, to make an annual payment of between 20p and 25p per share.

Earlier this year, Britannic was forced to close its with-profits fund to new business and scrap bonuses to some policy holders as a sustained plunge in stock markets squeezed its finances.

It has since sold off some subsidiaries and reduced its exposure to equities in an effort to get back on firm financial footing.

But it said it did not expect to have to cut its equity holdings any further in the light of the recent stock market recovery.