During the 2003 fourth quarter, the company strengthened reserves by ?96.7 million ($174.2 million), mostly for U.S. workers' compensation claims, with smaller amounts in the U.K. and Scandinavia. The company also added ?500 million ($900 million) in reserves earlier during its 2003 third quarter.

As the company works to resolve the expense overhang in the U.S., U.K. personal and Canadian commercial lines, the drag from the discontinued lines in runoff will continue to impact results for some time, Royal & Sun said.

Chief Executive Andy Haste said the 2003 fourth-quarter results were very similar to the previous quarter's. The company has shown "measured progress on capital, on the U.S., on reshaping the business and on improving our performance," he declared.

During the past year, the company has been busy refocusing and restructuring its businesses?cutting jobs, selling off units, and writing fewer policies after three years of losses triggered in part by high asbestos and U.S. workers' comp claims.

But Royal & Sun, the second-largest property and casualty insurer in the U.K., pointed out that the underlying performance of its ongoing operations in 2003, with a 96.8 combined ratio, has been "excellent."

The company said its improved ongoing operations reflect "the reorganizing of the company's portfolio of businesses, a positive pricing environment and the successful implementation of our operational improvement plan, as well as benign weather."

"We are continuing to move in the right direction and we remain focused on, and committed to, the delivery of our plans," Mr. Haste said.

The company's restructuring in the past year included selling renewal rights of Royal & SunAlliance USA's commercial-lines national accounts, middle market and marine businesses, and standard and preferred personal lines businesses. The insurer also sold off its U.S.-based Royal Specialty Underwriting Inc. and its Puerto Rican insurance unit in 2003.

Last September the insurer announced its plan to eliminate 1,000 jobs in the U.K., which represents roughly eight percent of its workforce in that country.