INSURANCE group Aviva, parent company of York-based Norwich Union Life, today unveiled a 37 per cent rise in half-year profits.

The figures prompted criticism from a union leader over the company's latest round of job cuts.

Karen Reay, lead officer within Aviva Life for Amicus, pointed out that in June Aviva announced 700 job losses across the country, including 150 jobs at York as a result of outsourcing IT operations to companies operating globally, including India, Europe and the US. Yet the group was now announcing profits of £1.13 billion.

She said: "We want to see any company do well because that should mean greater job security, but while the threat of yet more outsourcing remains, my members feel very insecure. The success and that insecurity don't add up."

Gary Withers, chief executive of Norwich Union Life, said that Aviva was in strong shape largely because of its performance in general insurance, "but within UK Life we are still having to work very hard to generate profitable growth".

The bounce back in the savings and pensions market had been relatively modest, he said.

There had been price caps in place over the past couple of years amounting to one per cent, now 1.5 per cent, and the market had to cope with an enormous amount of regulation over the past two or three years.

"We don't have a marketplace which is growing significantly so the challenge for life business is to become a lot more efficient, a challenge that runs right across the sector," he said, adding that Norwich Union Life needed to maintain its lead in the sector.

"So what you saw in June was one announcement to restructure the business and it will also be required over the next year or two."

Unfortunately, in the process, some roles had been lost but this was being handled in an open way and the company was looking to redeploy people where it could.

"This is a message we have been giving continually for some time and is very well understood by employees.

"These are difficult decisions and can be worrying for those individuals affected but we try to do it in a professional way."

He added that in spite of job cuts over recent years Norwich Union Life had kept its employment figures in York relatively stable at more than 3,000 people - an increase since the merger four years ago between CGU and Norwich Union.

Updated: 10:27 Wednesday, August 04, 2004