INSURANCE giant Aviva beat expectations to announce a six per cent rise in operating profits to £2.5bn, driven by impressive earnings in its life insurance division.
Chief executive Andrew Moss said his strategy of focusing the group on core products in just 12 key markets was paying off but singled out the British businesses for particular praise: “In the UK, which accounts for approximately half our profits, we have made good progress in our ambition to be the undisputed market leader.”
However investors were disappointed that the firm will pay a dividend of 26 pence per share for 2011, an increase of just two per cent: “It’s a measured reaction to uncertainty in the market in the last few months, but a dividend at these levels is sustainable and we expect it to grow from here,” explained Moss.
The firm also claimed that it has overcome fears that its capital reserves had been undermined by the Eurozone debt crisis.
Aviva says that it held £3.3bn in reserves as of 29 February, up from £2.2bn at the end of 2011.
It also boasted that it had added 413,000 car insurance customers, taking the total to two million.
Pre-tax profits dropped 96 per cent to £87m, mainly due to writedowns on the value of investments and a £726m hit from the divestment of Dutch subsidiary Delta Lloyd.
Shares closed up 5.6p at 356.8p.