Profits reflect the importance of Norwich to insurance giant Aviva but firm counts the cost of RAC sale

The importance of Aviva's Norwich-based general insurance business to the group was again underscored yesterday as the division posted a �226m profit - despite the company as a whole making a �681m loss.

It has been a turbulent few months for Aviva following the departure of chief executive Andrew Moss in the wake of a shareholders' revolt over executive pay and perks and lacklustre share performance.

Announcing its half-year results yesterday, Aviva said that operating profits had dipped 10pc to �935m following restructuring costs and lower returns from its life and pensions operations in the beleaguered eurozone.

However this turned into a loss after tax when extra costs were incurred including a one-off write-down on the value of its US business, and �49m in costs following from the sale of RAC, which was also based in Norwich.

The loss of the RAC business caused the combined general insurance and health profits to fall from �280m to �234m in the last year.

However, Aviva said that excluding RAC, operating profits for general insurance actually increased by 17pc from �193m to �226m, and would have been even higher had the firm not paid out �40m in weather-related claims in June.

Announcing the results, chairman John McFarlane said there would be no quick fix to Aviva's problems and warned of more challenging conditions ahead.

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Last month the insurer announced a restructuring of its business aimed at stripping out management tiers and saving �400m which will see a number of senior manager posts axed including in Norwich.

But McFarlane, who is leading the restructuring drive said he believed the company's three-year turnaround strategy was the right one.

Robin Spencer, the newly appointed chief executive of the UK and Ireland general insurance business, who took over the in the wake of the restructure, said Norwich still remained a crucial part of the business.

Mr Spencer confirmed that the consultation process regarding the job losses was now underway, but said he could not give precise details at this stage at how many staff were likely to be affected.

'We are looking to restructure the group to make sure we are as efficient as possible and to make sure we are the leading general insurance company in the country,' he said. 'We are always having to adjust our shape to reflect that. We still employ 6,000 people in Norwich. It remains really important for us. Yes we are probably going to see some roles falling out in Norwich as we will across the country - we haven't worked through that level of detail. It isn't material job losses in Norwich. Norwich will continue to be a major hub.

'I have got 50pc of my executive team running the general insurance business continuing to live in Norwich and I'm going to be spending around 50pc of my time in Norwich - it continues to be very important for us.

'Both the UK life and general insurance businesses have had a good first half,' he added. 'Operating profit for life was up 2pc. General insurance has a strong underlying business and improved about 17pc year on year, that was after �40m weather related claim costs in June.'