Following the fall of its profit by 20 per cent, Aviva has blamed poor conditions in Britain’s financial market.

The company, which is easily one of the world’s largest insurance groups, has seen its overall assets falling from £316 billion at the end of last year to £307 billion at the end of June this year.

It said downturn in the commercial property market in the country, especially real estate, was responsible for the poor showing.

Although the group’s fund management business, Morley, insisted that many of their funds were performing well “on a relative basis”, the wider Aviva group had a different view.

Reports said it was already selling equities within its life and health insurance portfolios, so as to reduce their risk.

The strategy will, however, reduce its return on investment from £315 million to £273 million for the six months period.

Meanwhile, the insurance group also said it was making a £1 billion payout to one million investors in the UK with profit funds.