Britain's second-largest general insurer Royal & Sun Alliance cheered investors today with a deal with regulators over its UK life business and reported first-quarter profits in line with expectations.
Shares in the beleaguered group jumped to the top of the FTSE leader board, up 8.4 per cent to 80.5 pence by 10:30 a.m.
Earlier this month, fears over the group's capital position had pushed the stock to a year low of around 72.5p.
Royal & Sun said it had reached agreement with Britain's Financial Services Authority (FSA) on capital requirements on its closed life insurance funds, which removed a potential capital impact of £500 million ($881 million).
"There is always a bit of nervousness when Royal & Sun reports results, but because there was nothing unexpected and the positive news on the FSA talks, what we are seeing from the shares is a sigh of relief," said Ms Victoria Hoskins, an investment manager at Gerrard.
RSA Chief Executive Andy Haste said the FSA deal, which will add more than 50 million pounds to its capital surplus in the second quarter, could help ease a sale of its UK life business.