AVIVA COFFERS BULGING

The insurance giant’s shares rose 21p to 400bp, despite an 11 per cent fall in sales, as the group revealed its capital buffer had risen by £500million to £3.7billion since June. More is to come from the sale of its Australian business and its float of a stake in Dutch insurer Delta Lloyd. The outlook for profitability was “good”.

He said the group would be putting the capital to work at some point. “There are three ways we can use it,” he said. “Restructuring our balance sheet, underwriting organic growth or bolt-on deals.” Moss said the group would look at assets being sold by ING.

Group sales fell to £27billion, largely the result of a 25 per cent fall in the UK. This was partly down to the recession but Aviva has also been sacrificing volume in favour of profitability.

The company has recently restructured its UK and European arms to improve their efficiency and further restructurings of other parts of the business might follow. Areas targeted for growth include the US and Asia Pacific.