Aviva profits surge after UK boost

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Aviva saw full-year operating profits increase by 26 per cent

Aviva posted a better-than-expected surge in annual profits as the insurance giant hailed the success of its recent advertising campaign starring actor Paul Whitehouse.

The group saw operating profits increase by 26% to £2.55 billion in the year to December 31, driven by a record result at its UK life and pension business and cost cutting.

Aviva recently launched a series of TV adverts starring Whitehouse, known for his work with comedian Harry Enfield, in which he plays a variety of characters promoting a range of insurance products.

The group, which outlined plans in November to save £400 million through cost cuts and efficiencies, said online quotes and sales were up one third over the same period last year since the Whitehouse adverts launched.

The operating profit haul beat the £2.45 billion analyst consensus forecast compiled by the company.

Aviva, which has 19 million customers in the UK, said the latest advert, which promotes life protection, has contributed to an increase in core protection sales of 14% to £674 million.

The group said its sponsorship of Premiership Rugby has also helped promote its brand to an additional 6.2 million television viewers.

Andrew Moss, Aviva chief executive, said the group had outperformed the market in a challenging economic environment.

He said: “Over the last few years, we’ve grown the business, significantly reduced costs and strengthened the balance sheet. As a result, we’ve created a good platform for the next phase of growth.”

The rise in profits came despite the impact of the Arctic conditions in December, which saw annual weather-related costs in its general insurance arm increase by £40 million above the company’s long-term average for the whole of 2010.

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