Insurer Royal and Sun Alliance (RSA) said asbestos claims and September 11 had rocked business as it unveiled a disappointing set of final figures.

The World Trade Centre (WTC) disaster was estimated to have cost the Horsham-based RSA £215 million and claims provisions rose by £384 million, hit by asbestos claims.

RSA has so far paid out only relatively small claims relating to asbestos but has experienced a marked increase in the number of potential claims it is receiving.

The group said its general insurance business had seen a solid performance around the world last year but this had been masked by the costs.

It meant the RSA operating result was severely impacted, sliding from £462 million to £16 million.

Chief executive Bob Mendelsohn said the figures were substantially below target, adding 2001 was a very difficult year and the group was disappointed with the results.

RSA's combined ratio on total general business was 112.6 per cent compared to 109.6 per cent in the previous year.

That means for every £1 RSA received, it paid out around £1.13.

Last year the group said it was aiming for a combined ratio of 103 per cent.

Stripping out the WTC and other costs, the underlying ratio was 104.7 per cent but Mr Mendelsohn said it was not at an acceptable level.

He said: "We continue to believe the outlook for this year and for a few years to come for the general insurance industry is better than it has been for some considerable time.

"There is a clear perception there are higher levels of risk in society as a whole and insurance can help offset some of that risk."