Aviva, the UK's largest life insurer, beat analysts' forecasts for the full year as the effect of "A-Day", introduced last year to simplify the pension tax regime, lifted life and pensions revenue by 18 per cent.

The company said total sales from its life and pension business increased to £26.2 billion for the 12 months to December 31, 2006, higher than market expectations of £25.8 billion. Revenues, including investment products, rose by 22 per cent to £31.1 billion, above City forecasts of £30.1 billion.

The company said that the buoyant equity market, and "A-Day" had helped boost revenue. The rule changes, implemented on in April last year, abolished annual limits on tax-free pension savings to allow people to save more for their retirement. The company said: "After A-Day we will see a return to more normal levels but we will still be in line with market performance."

Aviva said Norwich Union, its UK business, performed well. Sales were up 35 per cent to £13.9 billion, with life and new business revenue at £11.5 billion, compared with £9.1 billion last year.

Corporate pension sales were largely flat during the year at £1 billion, and will contract further as volumes shift from corporate pension schemes into personal arrangements.

In Europe, sales from life and pension products lifted to £14.7 billion. However, in France, Aviva's largest market outside the UK, sales rose by just 1 per cent owing to new savings reforms in the country. Sales in the US, up 44 per cent to £3.4 billion, included £324 million in revenue from AmerUs, the American insurer that Aviva bought last year for £1.6 billion after failing in its bid to buy Prudential, its UK rival. Richard Harvey, Aviva chief executive, is stepping down this year and will be replaced by Andrew Moss, the finance director.

Aviva said it is hoping to expand its Asian business further, pinpointing Taiwan and Malaysia. Total sales in Asia rose 91 per cent to £946 million.