Software provider Misys has backed up record annual results by announcing it will increase its spending on research and development (R&D) to £4m this year.

In its annual results for the year ended 31 May, Misys General Insurance revealed an operating profit of £14m, up £1m on the previous year.

Misys General Insurance chief executive Phillip Bell said: "These are extremely positive results for Misys General Insurance, particularly as the market consolidates and other software houses have not achieved the growth that they had anticipated."

The company is planning to use increased investment in R&D to expand staffing in the area to over 110 people, focusing on developing its OASys system and FSA regulation module.

Bell said: "Our research has shown that brokers and insurers want to deal with the more financially stable software houses, which are able to invest heavily in research and development as they have the ability to adapt in a rapidly changing environment.

He said: "Unlike other software houses, Misys General Insurance believes that given our UK focus, research and development is best placed to operate from our base in the UK."

But Misys group results tell a different story. Turnover for the group was down 10%, with operating profit dropping from £71m in 2003 to £30m in 2004.