Aviva has renegotiated its joint venture to distribute protection and pension products through Royal Bank of Scotland, as it reports a 31 per cent increase in profits for the first half of 2010.
The existing joint venture sees Aviva’s protection, pension and investment products sold through RBS branches with the firms sharing profits.
Under the new arrangement, Aviva will provide protection and selective pension products while RBS will receive all of the profits from the distribution of these products and will also manufacture and distribute its own investment products.
The re-purchase of Aviva’s right to share in distribution profits will hit RBS with a one-off loss of £235m.
Aviva announced earlier this week that it has signed an exclusive five-year deal with Santander, which will see its life insurance, critical-illness and income protection products distributed to the bank’s UK customers.
Meanwhile, the insurer reported a 31 per cent increase in profits before tax on a market consistent embedded value basis to £1.3bn compared with £1bn for the first half of 2009.
Operating profit on an international financial reporting standards basis was up 21 per cent to £1.27bn from £1bn in the first half of last year.
Aviva has also boosted its interim dividend per share by 6 per cent to 9.5 pence.
Group chief executive Andrew Moss says: “This was a good half year for Aviva. We achieved a 21 per cent increase in operating profits, grew sales for the third consecutive quarter and improved the group’s margin.
“At a time when predictability of cashflows and capital strength are crucial, Aviva’s capital generation stands out, and allows us to invest in the profitable growth of the business and increase the dividend.
“Our first half earnings are tangible evidence of the progress we have made in the last few years but there is more to do. We will continue to focus on customers and on the disciplined allocation of capital to ensure we grow Aviva profitably.”