The troubled insurance giant said that it would sell other businesses if they failed to improve their performance.

The statement came as the company, which is one of the biggest British insurance groups, published figures showing a fall of 39 per cent in annual pre-tax group operating profits to 602 million pounds.

Group chief executive Bob Mendelsohn blamed the downturn on "the unusual level of weather related and large losses."

He warned that if other units did not manage to improve their performance, they "will be fixed or eliminated".

Mendelsohn said in a statement: "In short, our group should look very different five years from now than it does today."

He said that the company was not prepared to invest the required amount of money into its US life business, which includes Royal Maccabees LifeInsurance Co and Royal Life Insurance Company of New York, to secure a profitable future for the operation.

"Although our life operation in the US is a well-run and profitable company, the scale of investment required to make it a major force in the US market is more than we wish to make at this time," said Mendelsohn. The sale to the the Swiss group hangs on regulatory approval. The company hopes to conclude the deal by late July.

Mendelsohn said that Royal planned to return 750 million pounds in cash to shareholders through a special dividend of 48 pence per share.Despite the sharp fall in pre-tax profits to levels that were below market expectations, the company board recommended a rise in dividend payments to shareholders to 23 pence from 21 pence a year earlier.