At close of play yesterday, Aviva’s share price was 285p, by 11am they had fallen to 212.75p – a drop of more than a quarter – following news that despite making a profit in 2007 of £1.5billion, last year saw losses of £885million.

The firm’s chief executive Andrew Moss says that despite a “tumultuous year,” Aviva remains “financially strong” with operating profits rising four per cent to £2.3billion, and total dividend per share maintained at 33p.

“In a tumultuous year, our underlying business has shown great resilience. Operating profits are up and we have maintained our dividend,” he said.

“Bottom line earnings have been affected by investment markets which have predictably created significant unrealised losses during the year. Aviva remains financially strong.”

Aviva has said it will continue with cost cutting efforts; Mr Moss explains “we’ve undertaken a thorough review of the value of our assets and liabilities, and have made cautious provision for future losses so that we are in good shape to withstand the ongoing volatility and uncertainty in world markets.

“Maintaining our capital strength has been a priority for us and remains so this year.

Meanwhile we continue to transform Aviva for the future.”

Mr Moss warns that “in these markets only the fittest will emerge as winners,” and is confident that Aviva is well prepared.

“Our increased share of the UK life and pensions market in 2008 is a good example of a market where we have growing competitive advantage.

“Our strategy is well-suited to current markets and our geographic diversity and composite model continues to deliver for us,” he said.

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