High insurance claims from flooding have failed to dampen Royal & Sun Alliance after it still manage to grow annual profits.

The insurer delivered a 4% increase in operating profit to £814 million. This was after accounting for £120 million loss from paying out flood-related claims to policyholders.

Analyst had expected operating profit to only come in at £732 million.

Net premium revenue increased by 6% to £5.84 billion, driven by demand in international operations, emerging markets and targeted UK growth.

'In challenging market conditions, we have again delivered a strong performance,' said chief executive Andy Haste.

'In 2007, we delivered profitable growth in each of our regions and achieved a strong bottom line result. The results have been delivered against the backdrop of a competitive rating environment, adverse large losses and weather, including the UK floods, and volatile investment markets.'

Shares in RSA slipped 0.1p to 141.7p in early trading on Wednesday.