The increase in reserves for losses from the World Trade Center disaster (65 million pounds using the same exchange rate) resulted from adjustments in the size of business interruption losses reported by insureds. About one-quarter of that amount is attributable to actual claim notifications and three-quarters to anticipated claim developments, the group said.

The group's initial estimate of World Trade Center claims just after the disaster was 150 million pounds (roughly $228 million)?a figure which was increased 200 million pounds (roughly $300 million) in mid-October of last year.

Commenting on results excluding the reserve addition, today's announcement said that the 2002 six-month result reflects continuing good performance across the Group's commercial and direct personal lines of business.

Globally, the company's underwriting result (excluding WTC) improved by nearly 25 percent, helping to offset lower investment returns and a decline in the performance of the life insurance operations in the UK, the group reported in a statement released this morning.

On a worldwide basis, the Group's half-year combined ratio for 2002, excluding the World Trade Center provision, improved to 103.0 from 104.3 for the first half of 2001. Including the World Trade Center development, the combined ratio for the half-year was 104.7, 0.4 points worse than last year.

Royal & SunAlliance USA's underlying six-month combined ratio (excluding WTC) also improved to 104.1 in 2002, compared to 104.5 in 2001.

Worldwide property and casualty insurance premiums for the first half of 2002 were $6,487 million (4,268 million pounds) vs. $6,790 million (4,467 million pounds) for the same period in 2001.

This decrease stemmed entirely from a one-year quota share reinsurance partnership with Munich Re. On an underlying basis excluding the quota share arrangement, global property and casualty premiums grew by 15 percent, the company said.

Royal & SunAlliance USA reported $1,524 million in net written premiums for the first six months of 2002. On an underlying basis excluding the quota share agreement, overall net written premiums were basically flat at $1,693 million, compared to $1,705 million for the first half of 2001.