Aviva posts £680m loss after US writedown

Insurer Aviva recorded a loss after tax of more than £680m in the first half of the year, after writing down some £870m of goodwill at its US business.

The post-tax loss of £681m compares with profits of £465m recorded in the same period in 2011.

The group said the biggest drivers of the overall loss were the US writedown, adverse non-operating items in Delta Lloyd totaling some £520m and restructuring costs.

Overall, interim operating profit before restructuring costs fell 2% to £1,121m.

The company is currently undergoing a project, overseen by executive chairman John McFarlane (pictured), aimed at reducing its costs base by £400m.

In its UK business, six-monthly life profits rose to £469m from £460m in the corresponding period last year.

Aviva said it is continuing to build its customer franchise in the UK. Earlier this year, it signed a five-year deal with Tesco Bank for the distribution of its protection products.

It added that a programme is underway to improve the financial performance of its fund management business. Operating profits for Aviva Investors fell to £34m in the period, from £39m last year.

McFarlane said: "While this has been a challenging first half, we are taking the necessary actions to improve our position going forward.

"This environment is likely to continue and therefore we expect second half performance trends to be broadly similar to the first six months, but with higher restructuring costs as we implement our strategic plan."