Royal & Sun Alliance (RSA) has joined the chorus of insurance firms predicting that the cost of cover for Irish customers may have peaked.

In a statement issued to mark the release of 2002 full-year results, RSA said "the outlook for the insurance environment in Ireland is more positive than it has been for some time", highlighting the benefits of Government initiatives such as penalty points.

The company said it looked foward to "playing its part" in adjusting premiums to reflect the cost of claims.

RSA recorded premium growth of 19 per cent in the Republic last year, bringing total premiums written to €438 million.

While the company did not separate Irish profit numbers from overall group figures, it said results were seriously hit by €18 million in flood-related claims.

Despite this, Irish operations were "strong", the company said.

RSA currently holds about one-fifth of the Irish market for property insurance and covers about 7 per cent of the Republic's motorists.

In London, the company announced a 62.5 per cent cut in its dividend and unveiled 2002 profits at the low end of expectations, dealing another blow to the battered insurance sector in Britain.

Insurers across the world have struggled with falling stock markets for the past three years, reducing the value of the investments they use to pay claims.

Dutch firm Aegon, which has a small operation in Dublin's International Financial Services Centre, yesterday met its own dismal forecast for a 35 per cent slide in yearly net profit to €1.547 billion.

The group's bottom line has been hurt by heavy provisions for bond defaults in the US and write-downs on deferred acquisition costs.