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Aviva, the UK's largest insurer, has reported an eight per cent drop in first-half operating profits following the recent floods.

Norwich Union's owner said that group profits slumped to £1.56 billion in the six months to June 30th, down from £1.7 billion for the same period in 2006.

The company said that "some of the worst floods in living memory" had hit the performance of its UK business, which saw profits drop 50 per cent on the previous year to £284 million.

Aviva reported a £235 million loss as a result of adverse weather conditions related to June's floods in England and Wales and warned that a further £165 million of losses from subsequent flooding in July would be reported in the company's full-year results.

Norwich Union announced earlier this month that it was increasing its premiums by ten per cent, but Aviva has insisted that the price increase is nothing to do with the recent floods.

Announcing first-half profits today the company did however report "excellent growth" in the sale of life insurance products, with "record" results in the US and UK partly offsetting the disappointing performance of its general insurance schemes.

The US in particular was singled out for its "outstanding" performance, with sales up 51 per cent over the period. Aviva also stressed that the integration of its US arm into the rest of the insurance group was "on track", with the company having bought insurer AmerUS last summer.

Commenting on the results Aviva chief executive Andrew Moss stressed: "Overall, Aviva has performed well in the first half of 2007.

"Substantial weather related losses in the UK have been countered by strong growth across our life and asset management businesses. The US has continued to be our star performer," he added.