Profits for Aviva's general insurance business rose to £959m for 2002 from £924m in 2001. And the business beat combined operating ratio targets of 102%.

The profit included £611m from Aviva's general insurance UK business. That's up from £590m in 2001.

Aviva executive director Patrick Snowball was delighted with the results, which were announced as Aviva, posted £1.8bn profit for 2002.

Snowball said that the results vindicated the merger strategy kick-started by former group chief executive Bob Scott. He added that the company was now a "beacon of stability" in a market that was suffering problems with capacity and solvency.

Norwich Union remained AA-rated, whereas Fitch downgraded R&SA to BBB+ last week and AXA Insurance was downgraded to A+ earlier this month.

One area Snowball has targeted for attention to improve results next year is distribution in the personal motor sector, where the combined ratio of 103% is just above NU's target of 102%.

Snowball hinted that the future of Norwich Union's personal motor with smaller brokers was under review.

"Direct Line's results are not a fairytale," he said.

Snowball added that distribution through retailers such as Tesco and Sainsbury's was resulting in price differentials of 30%.

"That's a lot more than commission," he added.

On commercial lines, Snowball said that NU had capacity and solvency. He said: "We are aware that the global and London markets overcooked rate rises and capacity has flooded back. We will be careful that doesn't happen in our markets."

The 2002 report said that Aviva's share of the UK general insurance market was 16%. Of that, 42% was small commercial and the rest personal lines. In 2002, 33% was for small commercial.