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Insurer Aviva has reported a one per cent operating profit rise despite a "challenging" year as the summer floods in the UK led to a writedown of £475 million.

Strong results in the company's savings division helped offset the heavy losses, according to the insurer.

Chief executive Andrew Moss said: "We remain confident about the growth prospects for our business and are committed to our growth and efficiency targets."

Earnings per share dropped 44 per cent, from 87.5p in 2006 to 49.2p in 2007, reflecting better-than-expected results from last year.

General insurance operating profit was down 39 per cent to £1.03 billion, while the group's combined operating ratio (COR) rose to 100 per cent from 94 per cent in the previous year.

COR is a measure of performance – a ratio of below 100 per cent means the company is making more money from its underwriting activities than it is paying out in claims.

The worst UK floods in 60 years led to 45,000 home insurance and 6,000 business customer claims, with the company paying out in 99 per cent of the cases.

The company's long-term saving business brought more success, with profits from new business growing 32 per cent to £1.17 billion.

Aviva remained upbeat about its outlook, setting a new target to double its earnings per share by 2012 and increasing its dividend by ten per cent to 33p.

The results beat investor expectations, and shares in Aviva rose in morning trading by 2.87 per cent to £6.27.