Aviva and Prudential, the biggest insurers in the UK, are expected to report first-half operating profits of more than £3 billion between them this week amid fears that the credit crunch has put a dampener on people's ability to save.

The projections, just over 5 per cent above the pair's interim figures last year, underscore the toughness of the UK market for life and pensions business, particularly as the nation prepares for a sharp economic slowdown.

The expectations come as Aviva is under scrutiny at its general insurance business, which suffered more than £400 million of claims-related losses in the wake of last year's shock summer flooding.

The UK's number one insurer is also expected to face questions about its loss-making operations in the Netherlands, which were sold earlier this year.

It is likely to be asked for an update on its worldwide rebranding exercise, which involves the ditching of Norwich Union in the UK.

It also faces questions on its lending relationship with Dawnay, Day, the investment group whose financial services arm has been forced into a capital squeeze in the past fortnight.

An early consensus of forecasts circulated by Aviva last week suggested that the group would report £1.708 billion of operating profits for the first half compared with £1.54 billion this time last year.

Prudential, Aviva's long-standing rival, is likely to record operating profits of £1.313 billion for the same period, according to analysts' forecasts last week.

Analysts are likely to grill the Pru on its performance in Asia, which has been generating more than half the group's sales and profits but is predicted to be beginning to tail off.

"Given that the Asian franchise value makes up such a large portion of Prudential's fair value and consensus is anticipating a significant slowdown in the growth rate, we believe this to be a key swing factor for the [first half results on Thursday]," analysts at Keefe, Bruyette & Woods said.

Some brokers believe that the Pru has met some early success at its UK arm, which has returned to the pensions buyout market with a £35 million bulk annuity deal for Rank, the leisure group.

The Pru's first-half life and pension sales in the UK are also thought to have held up well, analysts say.

The group is in the spotlight over its efforts to find a new chairman to replace Sir David Clementi, who is expected to step down at next year's shareholder meeting.

It is understood that the insurer's headhunters have compiled a shortlist of five or six candidates, including Bob Wigley, chairman of Merrill Lynch in Europe.

Headhunters have a front runner in mind, although the candidate's name is not known. A decision is expected in September or October.

Aviva shares were 17.5p, or more than 3.5 per cent lower, at 472.5p today. Shares in the Pru lost 6p, down just over 1 per cent at 509.5p.

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