Aviva today admitted that plans to cut a proposed £1bn payout to one million policyholders as tumbling investment markets test the country's largest insurer and put profits under pressure.

Aviva made the admission as it posted better than expected life and pensions sales of £36.3bn for the 12 months to the end of December, an 11% increase on the same period the previous year.

The group, which is dropping its famous Norwich Union brand, insisted that, at £2bn, its capital cushion against souring investments was strong and said that it would be maintaining its dividend policy.

The Times