Aviva profits up as they maintain dividend

Aviva, Britain’s largest insurer, has announced today that it will be maintaining its dividend, and that reported annual profits will meet forecasts as its 2008 operating profit of 2.297 billion pounds is a 4 percent increase on the previous year.

In the face of the current climate the insurer has said that the underlying business has shown great resilience.

However there has been some cause for concern as the company has recently had to do a u-turn on a pledge to over a million policyholders, who were going to receive an average windfall of £1,000 each. A fall in the markets and the property sector has reduced its surplus capital significantly.

Profits have been affected by the fall of the investment markets which have increased the unrealised losses during the year.

Chief executive Andrew Moss has said that the company has been prudent and has completed an extensive review of the value of its assets and liabilities and have made provisions for future losses and are sustainable.

Aviva has set aside extra £300m to cover potential losses on corporate bonds in the UK as well as £250m for commercial mortgage defaults.

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