• Overview
• Operating Review
• Financial review - Chief Financial Officer's report
• Directors
• Financial Statements
• Independent Auditors' Report
• Consolidated Income Statement
• Consolidated Statement of Recognised Income and Expense
• Consolidated Balance Sheet
• Consolidated Cashflow Statement
• Estimation techniques, uncertainties and contingencies
• Significant accounting policies
• Notes to the Financial Statements
• Download Data
• Directors' Report, Corporate Governance & Remuneration Report
• Parent Company Financial Statements
• Shareholder Information

Financial Statements

Independent auditors' report to the members of Royal & Sun Alliance Insurance Group plc

We have audited the consolidated financial statements of Royal & Sun Alliance Insurance Group plc for the year ended 31 December 2005 which comprise the Consolidated Income Statement, the Consolidated Statement of Recognised Income and Expense, the Consolidated Balance Sheet, the Consolidated Cashflow Statement, Estimation techniques, uncertainties and contingencies, Significant accounting policies and the related notes. These consolidated financial statements have been prepared under the accounting policies set out therein.

We have reported separately on the Parent Company financial statements of Royal & Sun Alliance Insurance Group plc for the year ended and on the information in Directors’ Emoluments and Directors’ Interests that is described as having been audited.

Respective responsibilities of directors and auditors

The directors’ responsibilities for preparing the Annual Report and the consolidated financial statements in accordance with applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union are set out in the Directors’ Report.

Our responsibility is to audit the consolidated financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

We report to you our opinion as to whether the consolidated financial statements give a true and fair view and whether the consolidated financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation. We also report to you if, in our opinion, the Directors’ Report is not consistent with the consolidated financial statements, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding director’s remuneration and other transactions is not disclosed.

We review whether the Corporate Governance statement reflects the Company’s compliance with the nine provisions of the 2003 FRC Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.

We read other information contained in the Annual Report and consider whether it is consistent with the audited consolidated financial statements. The other information comprises only the Highlights, the Key business information, the Chairman’s statement, the Group CEO’s review, the Royal & SunAlliance today section, the Operating and Financial review, the Corporate Responsibility section, the Share and shareholder analysis, the Directors’ Report, the Corporate Governance statement, the Remuneration Report and the unaudited part of Directors’ Interests. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the consolidated financial statements. Our responsibilities do not extend to any other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the consolidated financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the consolidated financial statements, and of whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Group financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the consolidated financial statements.

Opinion

In our opinion:

• The consolidated financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union, of the state of the Group’s affairs as at 31 December 2005 and of its profit and cashflows for the year then ended,
• The consolidated financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation.

PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
8 March 2006

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