Aviva tops £1bn at halfway

AVIVA, which owns Norwich Union, became the latest life assurer to beat City expectations as it reported strong first-half figures and said the savings market was picking up.

Operating profits across the business in the six months to 30 June rose 37% to £1.1bn on the industry standard achieved-profit basis as worldwide life and pension sales climbed 7% to £7.9bn.

New business rose 3% over the first half and the group said that it was continuing to benefit from a flight to quality away from struggling rivals and closed with-profit funds.

Chief executive Richard Harvey said: 'Consumers are s lowly regaining their appetite for saving.'

Aviva launched a fierce costcutting drive last year after seeing the bear market hit its finances, and just two months ago it announced the outsourcing of 950 jobs in its UK life business.

This will lead to a £30m charge in the second half, but margins across the business are picking up. The profit contribution from new business sales rose 10% in the first six months.

Harvey said: 'Profitability is responding well to ongoing value-based management actions.'

Aviva's results come at the tail end of what has been a bumper half-year reporting season for the life-insurance sector. Prudential smashed analyst expectations with a 55% jump in operating profits last week.

Legal & General followed the Pru and fuelled growing optimism in the sector by unveiling a 27% rise in first-half sales. It said consumer confidence was returning.