Insurers set to raise dividends in results week

THE INSURANCE sector earnings season is expected to deliver growing profits and dividend increases this week, though uncertainty over new European rules could dampen forecasts, according to analysts.

Legal & General is set to kick off on Wednesday with a widely tipped dividend rise. Analysts have forecast operating profits of up to £412m for the half-year, from £404m in the same period last year.

Aviva and RSA follow on Thursday, with the former expected to post operating profits of £1.15bn for the last six months. The sum represents a rise of 15 per cent on last year, and analysts expect the firm to raise its interim dividend by about five per cent.

Investors will look to Old Mutual on Friday to see if the firm delivers on its latest interim management statement, in which it said life insurance sales were up 21 per cent on the back of the best ever quarter in the UK.

Concerns over cash flow, consolidation and the expected fallout from the Solvency II rules could drag on predictions for the rest of the year, said analysts, and mixed results are expected from Standard Life, Prudential and Resolution when they report next week.