Andy Cook contrasts the results of two industry giants

The 2001 financial results of Norwich Union (NU) and Royal & SunAlliance (R&SA) were published last week. And what interesting reading they make. NU nearly doubled its profit to within spitting distance of £1bn, while R&SA's profit was within a stone's throw of nothing.

OK, R&SA's results include massive exceptional costs attributed to World Trade Centre losses and vastly increased reserving for asbestos claims. Even so, R&SA's combined operating ratio (after taking out WTC and asbestos) was in excess of 104% against a target of 103%. NU achieved 102% compared with 108% in 2000.

Like it or not, and most brokers do not, NU has been backing away from lines of business that don't make money. This is reflected in improved combined ratios for property, which fell to 104% from 120% in 2000. The combined ratio for liability fell from 131% in 2000 to 126% last year - not great, but heading in the right direction.

Read between the lines at R&SA and the picture is different. The combined ratio for casualty lines escalated from 120% to 157%. That said, motor and property (both commercial and personal) improved. So all is not doom and gloom.

What unites the two sets of figures is that under the circumstances, they both show signs of promise.

Even so investors have shied away from the stocks. R&SA prices are at an all-time low, fuelling speculation of a bid and Aviva's stock is 10% down on pre-result pricing.

With the quoted Lloyd's companies also suffering on the stock exchange, it seems that non-life insurance's brief flirtation as the investor's darling is over. So it's time to get on with what we've got.