Funds under management at Aviva Investors, part of the life insurance giant, increased from £263 billion to £274 billion during the six months ended 30 June.

The operating profit at the investment firm fell, however, from £39 million for the first half of 2011 to £34 million for the same period this year.

Aviva Investors said it won mandates in the UK, Middle East and North America during the six-month period, taking external sales to £1.6 billion, down from £2.5 billion in the first half last year.

The firm also said that a programme is underway to improve the financial performance of this business.

Across its divisions, the firm is committed to reducing its cost base by £400 million. "We have already removed the regional layer of our structure, reduced the number of management layers and have made substantive changes to promote a sharper performance ethic across the group," it said.

The Aviva group made a net loss after tax of £681 million, compared with a profit after tax of £465 million in the same period in 2011, after it decided to write down £876 million of goodwill and intangibles at its US business.