Britannic heralds hope on dividend

TROUBLED life assurer Britannic hit back at its critics today after delivering better-than-expected first-half results and signalling that it expects to return to the dividend list early next year.

Chief executive Paul Thompson said the group, which stunned the market with a profits warning in January, was reaping the benefit of its repositioning since the start of the year.

Britannic has closed its £5bn with-profits fund to new business, cut its exposure to equities and sold off its mortgage arm in a desperate bid to shore up its finances.

Thompson said the free asset ratio - a measure of the capital it has over and above what it needs to pay claims - in the group's Britannic Assurance arm is up from 6.5% to 10% while shareholder funds are flat at £986m.

The fragile stock markets contributed to an £8m fall in operating profits to £44m in the first half to 30 June but the results beat analyst expectations.

Shareholders may receive a dividend after the final results next March - the first for 18 months.

Thompson said: 'In terms of what we said earlier this year I believe it was the right thing to do. These results reflect the action we decided to take.'