Aviva, the UK's biggest insurer, has offset flood losses with a strong performance from Norwich Union in life and pensions including an improvement in the key area of policy perseverence and customer retention.

At the end of its first year under new chief executive Andrew Moss, the former finance director, Aviva rallied City sceptics by promising to double earnings per share within four years and unveiling a new fund management super-business.

The £316bn Aviva Investors will mop up 15 separate global fund management units including Morley, whose problems included the recent loss of its property team to Edinburgh-based Aegon, and the tragic death last year of Chris Phillips after he had been lured from Scottish Widows to be chief executive but before he could take up the post.

Aviva managed to beat forecasts with a 1% rise in 2007 profit, despite the already-flagged £475m flood losses which saw general insurance operating profit plunge by 39%. It said a "multiple weather event" reinsurance policy, only now in place, would have reduced the losses by £100m.

On the earnings target, analyst Kevin Ryan at ING said: "It's a brave move and ambitious, given we are in a global slowdown, and it is never easy to drive a life business forward in a slowdown."

Moss said: "It's been a tough year, but financially we are very strong with minimum exposure to the credit crunch."

He also revealed that Aviva had offloaded £3.4bn of equities last autumn before the worst of the market falls.

Aviva's major funds saw their equity and property exposure dip during the year.

In its core UK market sales were up by 5% to £11.6bn and life profit (a third of the total) rose 16% to £864m.

Aviva said its "persistency experience" of policies staying on the books had improved from a £66m loss to a £5m loss, thanks to more efficient administration and better options for maturing policies.