GRE lifts its capital results above the line

GUARDIAN Royal Exchange, the insurance company, is planning to change the way it presents its accounts to include in pre-tax profits rises and falls in the value of its investments.

Like other insurance companies, GRE currently excludes investment gains and losses, whether realised or not, from pre-tax figures and shows them below the tax line. It plans to shift them higher up the profit-and-loss account in time for this year's results.

Had GRE made the change last year it would have reported a pounds 52m pre-tax profit instead of a pounds 210m loss. In the previous year the change would have increased the loss from pounds 157m to pounds 430m.

James Morley, the finance director, said the change was not designed to boost profits but to reflect the returns of the business.

Capital gains and losses arise from investing insurance premiums and should be considered alongside underwriting profits and losses, he said.

Pre-tax profits already include investment income - dividends and other interest receipts - but not capital gains and losses.