COMPETITIVE pressure from direct insurers is starting to have a

significant impact on traditional sales outlets and Sun Alliance is

planning to scale back its Swinton chain of brokers.

The group plans to close 64 branches out of 690 with the loss of 200

jobs. Instead, the existing direct sales operation, which has 1,250,000

customers, is to be scaled up with a new national telemarketing centre

and there are plans to move into Europe.

This comes as the group reports a big recovery in profits, which were

nearly trebled to #180m for the first half of the year. The interim

divided is raised 5% to 5.5p.

Chief executive Roger Taylor said there was a satisfactory

underwriting profit and good progress was made in overseas general and

life insurance. The recovery in profits was now ''well founded''.

In the UK, personal business achieved a ''healthy underwriting

profit'', and UK commercial business also turned in a good performance.

Profits on motor insurance were deemed acceptable and mortgage

indemnity losses were again reduced. Insurance profits were also

achieved in several European operations.

The stock market slide in the summer led to a fall in shareholders'

assets, but this was partly offset by an upturn in the group's worldwide

property portfolio, and since then share prices have largely recovered.