By Richa Naidu
LONDON (Reuters) - British insurer Aviva (L:AV) posted a 4 percent rise in first-half operating profit as its European and UK general insurance businesses built on a strong start to the year, making up for weakness in Canada.
The company's London-listed stock was the top gainer on the FTSE-100 (FTSE:), trading up as much as 3.7 percent on Thursday morning.
Aviva, which provides personal lines of insurance including motor, home, travel and life cover, also said it was now aiming for an operating expense ratio of below 50 percent and to double its annual excess holding company cash flow to 800 million pounds.
Morgan Stanley Research analyst Jon Hocking said Aviva's first-half operating expense ratio of 52.1 percent suggested the company might over-deliver on its target expense ratio of below 50 percent by the end of 2016.
He maintained his 'overweight' rating on Aviva's stock, which was up 2.8 percent to 503 pence at 0904 GMT (10.04 a.m. BST).
Aviva has been looking to cut costs and has promised income hunting investors bigger returns by laying off staff, spinning off some businesses and shaking up its asset management arm.
It said last month it hoped to double the amount of excess cash that the next stage of its ongoing turnaround plan could generate.
Operating profit increased to 1.05 billion pounds in the six months ended June 30 from 1.01 billion pounds last year.
The value of new business (VNB), Aviva's key measure of growth in life insurance, jumped 9 percent to 453 million pounds as its Polish, Turkish and Asian businesses grew 54 percent. The three units account for about a quarter of overall VNB.
(Reporting by Richa Naidu; Editing by Tom Pfeiffer and Mark Potter)