The firm has boosted its capital surplus to £3.2bn compared with £2bn at year-end. But it has slashed its interim dividend by 31 per cent to just 9p a share from 13.09p, citing lower earnings.
On an IFRS basis, operating profit dropped to just over £1bn from £1.2bn in the first half of 2008. Meanwhile operating profits using MCEV accounting standards increased to £1.68bn from £1.5bn the previous year.
Life and pensions new business sales were down 4 per cent in H1 2009 although the firm says margins have increased. UK life and pensions sales were £4.7bn, down from £6bn in the first half of last year.
The firm has announced plans for a partial IPO of Aviva’s Dutch business Delta Lloyd when market conditions allow in a bid to free up capital.
Group chief executive Andrew Moss says: “In a challenging economic environment Aviva has returned to profit, life and pensions margins have improved, the general insurance business has beaten our targets and our regulatory capital position has strengthened significantly.
“Our overriding priority now is to continue to build a position of strength from which Aviva can exploit market opportunities. In this context we have decided to reduce our interim dividend to 9p per share in line with lower investment earnings in 2009.
“These actions, together with ongoing focus on cost management and the sale of Aviva Australia, will significantly increase our strategic flexibility. In the long term interest of our shareholders we are determined that Aviva should be in the best possible shape to seize opportunities to grow and add value.”