Aviva announces £1.3bn profits

Aviva chief executive Andrew Moss

A slimmed down workforce helped Aviva achieve £1.3bn profits last year - after losses of £885m in 2008.

The insurer, Norwich's biggest employer, said a 19pc reduction in staff globally had helped achieve a £500m cost savings target one year early, contributing to the company's “strong” results.

Today's improved figures come despite a fall of nearly £2bn in general insurance and health premiums, down from £11.1bn in 2008 to £9.2bn last year, and follow the 1.1bn euro (£998m) flotation of the Dutch Delta Lloyd health business and the sale of its Australian business.

The general insurance division was hit by adverse weather in Europe, including £100m payouts following flooding in Cumbria and Ireland, as well as increased unemployment claims from UK creditor customers.

Profits in the insurance division were down 20pc at £960m.

But as reported last month, the company was buoyed by an 11pc increase in profits from its life business at £1.9bn.

Group chief executive Andrew Moss said the company made “significant progress” in “maximising the value” of Aviva last year, with savings from restructuring invested in products which he said would deliver the best returns.

Mr Moss said the company now had 10,700 fewer employees globally than two years ago, down 19pc, while in the UK - which saw nearly 500 redundancies announced in the life arm in Norwich over the summer - the figure was down 30pc.

The reduction was partly down to the disposal of “non-core” businesses, Mr Moss added, as well as “natural turnover” of staff.

Mr Moss said: “2009 was a year of significant progress for Aviva; a year of strong financial performance and delivery against our strategic plans.

“Against a challenging economic backdrop we focused on profitability and made clear choices to optimise our capital and reshape our portfolio through the successful flotation of Delta Lloyd and the sale of our Australian life business.

“We've taken out costs by creating simpler, more modern ways of doing business which reflect the changing way customers choose to deal with us.

“In driving Aviva forward we will retain our disciplined approach to capital and profitability.

“We expect the external environment to remain unpredictable for some time but are encouraged that we saw the first signs of an improved appetite to save among our customers in the final quarter of last year.”

Aviva, which dropped the historic Norwich Union brand last summer, employs about 6,000 in Norwich, which is home to the firm's general insurance headquarters.