United Friendly boosts payout after 16% advance

UNITED Friendly Insurance increased its profits by 16.4 per cent in 1992 to pounds 23.4m.

Although earnings per share rose more modestly, by 13.9 per cent to 23p, United Friendly has lifted its dividend by nearly 18 per cent. A final payout of 9.6p makes a total of 14.5p.

Life insurance profits increased from pounds 10.7m to pounds 11.2m, while the company reduced its general insurance loss from pounds 4m to pounds 1.9m. Life profits were held back by development costs of the new unit-linked business, which is expected to make a profit this year.

In line with most of its rivals United Friendly has cut the bonuses it pays on with-profits life policies. Total bonus allocations of pounds 112.6m were pounds 28.2m lower than in 1991.

Changes in bonus policy in recent years have brought 'policy benefits more closely in line with underlying asset values'. United Friendly said it had broadly completed the necessary changes.

The company said it intended to publish financial information on the basis of so-called accruals accounting - an approach which is intended to give a better indication of the true profitability of life insurance companies, and which gives more weight to new business sales than statutory accounts. United Friendly said it would produce accruals information after it had identified its shareholders' interest in its life funds, another initiative announced recently.

Life premium income exceeded pounds 200m for the first time last year, with regular premiums rising modestly from pounds 117.1m to pounds 123.5m and single premiums up pounds 28.5m to pounds 77.2m.