Aviva profit jumps by a quarter

City A.M. Reporter
Aviva reported a forecast-beating 26 per cent increase in 2010 profit, helped by cost cuts and stronger sales of high-margin life policies. Aviva, Britain's second-biggest insurer by market value, said it made a 2010 operating profit of £2.55bn, up from £2.02bn pounds the previous year.

Analysts had expected a profit of 2.44bn, according to the company's own calculation of consensus expectations.

"By focusing on what we do best in the markets where we have strength and scale, we will continue to prosper in 2011," chief executive Andrew Moss said in a statement.

Aviva has been cutting costs, paying off debt and focusing on cash generation in an effort to improve shareholder returns, amid criticism from some investors that it has underperformed its main British rivals.

The company, which generates about 70 per cent of its sales in Britain and mainland Europe, has also pledged to focus on the markets where it is strongest.

The profits improvement last year was driven by Aviva's life insurance business, where operating profits rose 23 per cent to £2.32bn.

The company also benefited from £149m of cost cuts.