Insurance giant CGNU has reported a surge in year-on-year sales after benefiting from a strong performance from its UK-based operation.

Sales in the company's core UK market rose 30 per cent to £1.3bn as CGNU posted better than expected overall figures.

Worldwide life and pension sales were up 12 per cent to £2.5bn last year.

Today's report from CGNU features the first full-year figures since the merger between CGU and Norwich Union in 2000.

Chief executive Richard Harvey said the group's results also included a record ten per cent rise in worldwide long-term new business sales to £15bn.

"This growth, and particularly the excellent growth we achieved in the fourth quarter, is pleasing given challenging market conditions," he said.

"From strong market positions, our businesses have outperformed their local markets in 2001."

Long-term new business sales in Britain hit a record high at £8.1bn, an increase of eight per cent on last year.

All UK life and pension sales rose ten per cent to £7.3bn in the UK, while the figure for continental Europe was up 39 per cent to £5.5bn.

Mr Harvey said: "These excellent results demonstrate the strength of the Norwich Union brand and our UK life business."

Total pension sales in the UK grew by 39 per cent to £2.5bn during the year, helped by a strong brand profile and successful stakeholder pension campaign, CGNU said.