RSA says its financial position has improved

The firm said operating profits fell to �310m ($550m) from �351m a year ago, partly due to lower investment returns.

But RSA said it was in a stronger financial position following a series of disposals, and the profitability of its UK business had improved.

It added it had rejected takeover moves for its Danish business Codan.

"We've made strong progress on executing our strategy during the half while producing another set of good results from our ongoing businesses," said chief executive Andy Haste.

Investors welcomed the results, sending RSA shares up 3.6% to 71.25p by the close of trade.

Fewer risks

Royal & Sun has been undergoing a major restructuring which has seen it shed about 20,000 staff and focus on general insurance.

The firm has also sold a number a number of assets to strengthen its balance sheet, including the sale of its UK life business for �850m.

Mr Haste said the sale of the life business had brought greater certainty to RSA's balance sheet.

"Together with the work to optimise our debt structure it will also strengthen our capital position and gives us confidence of complying with the new regulatory regime," he said.

The UK's financial regulator, the Financial Services Authority, has also introduced tough new solvency rules to ensure it has a clearer picture of the financial strength of insurers.