Aviva posts profits of £2bn
Insurance and pension giant storms ahead in UK market
Car insurer and pensions giant Aviva said 2011 profits were up 6% to £2.1bn after it boosted its share of the UK market.
The group achieved record operating profits of £931m in its UK life insurance division, with gains in its core markets of workplace savings, annuities and equity release products.
In its general insurance business, where it is the UK market leader, Aviva's profits were up 7% to £520m after the roll-out of direct pricing to motor insurance brokers and the launch of its 'quotemehappy' website.
The group, which is the UK's largest insurer with 14m customers, also grew profits in Europe despite the economic climate in countries where it has a major presence, such as Spain and Italy. On the back of yesterday's results, chief executive Andrew Moss increased the company's targets for this year in both general and life insurance.
He added: "Although the economic environment is likely to remain tough for the foreseeable future, we have built a strong, sustainable and diverse business well positioned` for further profitable growth."
Shares have climbed 30% from December lows as sentiment about the eurozone debt crisis has improved.
The trend is reflected in Aviva's balance sheet after its solvency cushion improved to £3.3bn at the end of February from £2.2bn at the end of 2011.
Helped by a successful advertising campaign featuring comedian Paul Whitehouse, industry figures recently showed Aviva overtook Churchill and Direct Line owner RBS Insurance as the biggest general insurer in the UK.
The improvement follows upward pressure on car premium rates across the industry and a surge in the firm's own customer numbers, with its motor premiums up by 13%.
Rising costs have been blamed on a "compensation culture" encouraged by ambulance chasers and also on a rise in fraud.
Aviva's record operating profit from its UK life insurance division