The world's fifth biggest insurance broker said profit before tax, goodwill and exceptional items jumped 21 percent to ?101.8 million ($162.5 million) in 2002.

Analysts had on average expected a profit of 100.8 million.

“They're doing well. But considering how favourable market conditions are for them, I was hoping they might have done better,” said Robin Savage, an analyst at WestLB Panmure.

He said revenue growth of 11 percent was well short of his expectations and there were no signs Jardine was taking market share from big US rivals, such as Aon and Marsh & McLennan.

Savage cut his profit forecast for 2003 to ?115 million from ?137 million, and downgraded his investment rating on Jardine shares to “underperform” from “neutral.”

At 1355 GMT the shares, which have outperformed the UK insurance sector by 60 percent over the past year, were 1.4 percent higher at 633- pence, valuing the business at about ?1.2 billion.

Insurers are having a tough time. After an estimated $50 billion bill for the World Trade Center tragedy in September 2001, the sector has been ravaged by plunging stock markets and historically low interest rates.

Jardine Chief Executive Steve McGill estimated the sector had lost around $200 million of capital since 2001.

Insurers have responded by raising premiums which, as a middleman between underwriters and clients, has boosted Jardine's commission and fees.

“Demand for our services has never been stronger,” Jardine's McGill told reporters on a conference call.

“In our view the hard market (high insurance premiums) will continue through 2003 and 2004,” he continued.

Revenues from continuing operations rose 16 percent to ?313.6 million in the Risk and Insurance division, which accounts for around 80 percent of the total.

But sales in Employee Benefits, which provides consulting and pension administration services, were flat at 74.5 million pounds.

Jardine said it had experienced an unexpectedly steep fall in demand for reviewing claims that clients mis-sold pensions.

McGill played down the fall, saying the firm had always known this business was temporary.

The Employee Benefits division also hoped to win four outsourcing contracts in the next few months which could be similar in size to a 10 million pound deal it struck with Prudential Plc in 2001, he added.

Jardine proposed a final dividend of 11 pence per share, taking the total for 2002 to 18.5 pence, up 16 percent on 2001.