Aviva reports 6% rise in profits

Aviva reported a bigger-than-expected 6 per cent rise in its 2011 earnings, helped by better profit margins in its life insurance business, and said capital reserves had recovered from a hit they took last year as a result of the euro zone debt crisis.

The company, Britain's second-biggest insurer, had an operating profit for the year of £2.5 billion  (€3 billion), it said today, ahead of the 2.41 billion (€2.89 billion) pencilled in by analysts in a company poll.

Aviva also said its Insurance Groups Directive capital surplus, a key measure of capital strength for European insurers, had risen to £3.3 billion as of February 29th, up from £2.2 billion at the end of last year.

In November, Aviva said falling euro zone government bond prices had cut its surplus by 30 per cent to £2.7 billion between July and September last year, prompting a steep fall in its share price.Aviva shares closed at 355 pence on yesterday, valuing the company at about £10.2 billion pounds.

Aviva to planning to cut 1,200 jobs in Ireland over the next two years. Workers in the IT, claims and operations divisions in Dublin will take the brunt of the job cuts, as well as those working in branches around the country.