The steep fall in annuity business has had a knock-on effect on the value of new life business written which fell 21% in H1 to £177m.

This is down from £224m in the first half of last year.

The value of new annuity business gives an indication of future cash flows.

UK insurers are reporting heavy falls in their annuity sales following the government’s radical overhaul of pensions announced in the March Budget – which effectively swept away the need for retirees to by an annuity.

Overall the insurer’s UK life business grew its operating profits by 8% compared to the first six months of last year.

Sponsored

£2.5m paid to help broker clients benefit from greener homes

Sponsored by Halifax Intermediaries

This meant a rise to £478m up from £446m, which included a net additional benefit to profit of around £100m from actions Aviva said it had taken on its back-book, without giving details.

The value of new protection business increased 25% to £45m, led by increased sales by Aviva’s bancassurance partners.

Group chief executive officer Mark Wilson said: “The half year results show that momentum in Aviva’s turnaround continues.

“All of our key metrics have improved.

“We have reduced our debt, decreased expenses and increased profit – this is just good business. Aviva remains a work in progress, and these results are a step in the right direction.”