Aviva profits rose by 11 per cent last year and the comp-any says it welcomes the FSA's new realistic reporting regime.
Its operating profits increased to £1.91bn last year from £1.72bn in 2002. This figure includes life profit, amortisation of goodwill and exceptional items.
Aviva's results compare favourably with Prudential, which showed a drop of 27 per cent in operating profit to £794m from £1.1bn.
Total sales in the UK and European insurance opera-tions dropped by 21 per cent to £616m from £780m.
Aviva says it has assessed its UK with-profits funds under the new realistic reporting regime and says its solvency is still strong. It measures its realistic solvency at £4.3bn, with another £4.9bn put aside for the “fair” valuing of guarantees, options and promises on these policies.
At group level, the firm's general insurance business has performed well and its European markets business is still growing but the UK market has continued to prove difficult.
UK total life and pension business dropped to £1.07bn from £1.23bn but Norwich Union regained its position as leading provider with a market share of around 12 per cent.
Group chief executive Rich-ard Harvey says: “Aviva is one of the best-placed life com-panies in Europe to benefit from an upturn, with our leading market positions, strong brands, unit-linked skills and pension expertise to benefit from widespread reforms.”
NU Life chief executive Gary Withers says: “We think realistic solvency is a better way to look at the financial strength of a life company and we have a strong realistic solvency position.”