AVIVA has pledged to hand more cash to shareholders after announcing a hefty jump in profits despite taking a hit from Government changes to personal injury claims.
The insurance giant cheered a 12 per cent rise in operating profits to £3.01 billion for the year ending in December, as it saluted a "breakout year" for its fund management arm.
Aviva Investors' assets under management grew by close to a fifth at £345bn, with fund management operating profits climbing 32 per cent to £139 million.
Net written premiums in the general insurance business lifted by 15 per cent to £8.21bn, while the value of new business within life insurance rose 13 per cent to £1.35bn.
It came as the insurer said it would suffer a £380 million blow from the Government's proposed changes to the Discount Rate calculation, which is expected to increase payments given to victims of life-changing injuries through medical negligence, car crashes and other incidents.
Chief executive Mark Wilson said the firm was now tightening its focus on driving down debt and investing in growth.
"Aviva's results are simple and clear-cut: more operating profit, more capital, more cash, more dividend. And there is more to come," he said.
"Aviva's financial position has been transformed and a distinctly stronger balance sheet and excess capital give Aviva more options. We are now actively planning a capital return to our shareholders and debt reduction in 2017 and will invest further to grow our businesses.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Aviva had managed to buck the industry trend by delivering simple and clear-cut results.
"There are no sweeping strategic changes and, short of the impact of the Ogden rate on the general insurance business, no unpleasant 'exceptionals'.
"All divisions delivered steady growth, Solvency improved more than expected and the dividend rose ahead of expectations.
"Overall, these results suggest Mark Wilson has built up a solid set of foundations at Aviva. Steady profit growth and plenty of capital generation mean the group can start funnelling cash back to investors or fund new expansion as management sees fit."
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