Aviva said it is committed to the UK “hook, line and sinker” after it unveiled forecast-beating 2011 profits and became the largest general insurer in Britain.

Industry figures show that Aviva has overtaken Direct Line, the recently rebranded insurance division of Royal Bank of Scotland. Shares in Aviva closed up 5.6p at 356.8p.

Chief executive Andrew Moss, who took the helm in 2007, highlighted Aviva’s UK performance where profits climbed 8% to £1.45bn. It has grabbed a bigger share of the UK life and pensions market, now at 12%.

The group also won 400,000 new car insurance customers, taking the total to more than 2 million, after the rollout of direct pricing to brokers and the launch of its quotemehappy website. It still lags behind Admiral, the second-biggest UK car insurer with 2.9 million customers, which reported rising profits on Wednesday, and Direct Line, Britain’s No 1 car insurer.

Aviva is developing a phone app that could take the place of a telematics black box to reward the more careful drivers by reducing their premiums. Aviva’s car premiums rose 13% last year but growth slowed to single digits in the second half.

David Barral, chief executive of Aviva’s UK Life business, tweeted that Aviva is committed to the UK “hook, line and sinker” and has no plans to move its head office. Aviva describes the UK, which contributes nearly half of its profits and where it has 14 million customers, as the cornerstone of its strategy.

Prudential said earlier this month it was considering moving its headquarters abroad, because of EU plans to force insurers to hold more capital through regulation known as Solvency II.

Aviva, which operates in 21 countries (down from 30 a couple of years ago), beat City forecasts with a 6% rise in operating profits to £2.5bn in 2011 from continued operations. City analysts had pencilled in £2.4bn. Profit before tax slumped to £87m from £2.4bn, including a £726m loss relating to its Dutch subsidiary Delta Lloyd. Aviva raised the bar again after beating all its operating targets in 2011.

Aviva’s eurozone debt exposure has fallen to £1.3bn from £1.6bn in 2010, equivalent to 1% of shareholder assets. Aviva has a big business in Italy and Spain, but it has zero exposure to Greece and Portugal and “very little” to Ireland, said Aviva’s finance chief Pat Regan. “We’re pretty comfortable with that level.”

Moss said conditions in Europe were “undoubtedly tough”. “People are still nervous in some of those markets and that will affect sales, of unit-linked products, for example,” he said.

Asked about the eurozone debt crisis, Moss said there had been a “sea change” since the European Central Bank started providing more liquidity for banks. “It’s perfectly clear that the politicians have a much better grip on what’s happening. There are going to be a few bumps in the road, but overall the trends are towards consensus and agreement.”

Moss said the company would carry on simplifying its portfolio. Last year, it sold the RAC breakdown business for £1bn, further reduced its stake in Delta Lloyd to 43% and offloaded its Czech, Romanian, Hungarian and Slovakian operations.

Oriel Securities analyst Marcus Barnard said: “At first glance a better than expected set of results, with plenty for the bulls and something for the bears.” He said the dividend had fallen slightly short. Aviva will pay out 26p a share to shareholders, up just 2% from 2010 and below expectations of 26.8p.