Insurance group RSA posted a double-digit rise in profit for 2020 ahead of its £7.2bn takeover by a consortium of Canadian and Danish buyers.
RSA, which owns brands including More Than, reported operating profit of £751m, up 15 per cent year on year.
Group underwriting profit also jumped 36 per cent to a record high of £550m.
The company, which specialises in home, motor and commercial insurance, said the positive trading was a result of improved underwriting disciplines and cost efficiency.
RSA said it paid out roughly £4.6bn in regular claims, while Covid-related claims totalled more than £250m.
Overall, it estimated a £42m hit to profit as a result of Covid from premiums, claims and investment income effects.
Shares in RSA slipped just under two per cent in morning trading.
It comes ahead of RSA’s takeover by Canada’s Intact Financial and Denmark’s Tryg, which is due to complete in the coming months.
Under the terms of the all-cash deal, Tryg will take over the Swedish and Norwegian arms of RSA while Intact will have the Canadian, British and international businesses.
Chief executive Stephen Hester hailed “excellent results” for the year despite the impact of the pandemic.
“We have built a high performing company and 2020’s results showcase the value creation thereby achieved. This in turn drove the 52 per cent premium we were able to negotiate in the four quarter through an all-cash bid from Intact and Tryg.”
Hester is set to step down as boss once the takeover deal has completed.
“All things considered these were some pretty good results,” said William Ryder, equity analyst at Hargreaves Lansdown. “The UK business continues to lag the other regions in profitability, but the group’s combined ratio has improved year on year to a pretty respectable 91.1 per cent.”
He added: “For some investors RSA’s results are going to feel like a formality. The takeover bid has been approved by shareholders, the board is enthusiastic and the deal looks set to complete soon. However, we’d encourage investors not to count their chickens before they’ve hatched — the deal could still hit a snag and fail to go through.”