Shake-up at insurer
Aviva cuts 1,800 jobs and splits ‘to crack complexity’
Aviva CEO wants to ‘crack’ its complexity
Aviva has unveiled plans to cut 1,800 jobs and confirmed plans to split its life and general insurance businesses.
The company said it intends to reduce expenses by £300 million a year by 2022 through lower central costs, savings in contractor and consultant spend, reduction in project expenditure and other efficiencies.
It said it will look to ensure that redundancies among its 30,000 strong workforce “are kept to a minimum wherever possible, for example through natural turnover.” Aviva is in talks with trade union Unite and its employee representative bodies and will continue to consult on specific proposals.
The company, which employs 3,000 in Scotland based mainly in Perth, Glasgow and Dundee, said the life and general insurance businesses in the UK will be managed separately, with the digital direct business integrated into UK general insurance. Aviva said this will enable stronger accountability and greater management focus on the UK’s leading life and general insurance businesses.
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Chief executive Maurice Tulloch, said the move was a “first step” in a plan to simplify the business and make it “more competitive and more commercial”.
He said: “I am also determined to crack Aviva’s complexity, an issue which has held back our performance for too long.”
Angela Darlington is appointed interim chief executive of UK Life and Colm Holmes is appointed chief executive of General Insurance. Tom Stoddard’s departure as CFO was announced yesterday.
Aviva has reiterated its commitment to a progressive dividend policy and debt reduction of at least £1.5 billion. It said year-to-date trading is broadly consistent with 2018: weaker performance in savings and asset management arising from lower investment markets have been partly offset by growth in Europe and Asia together with progress on our turnaround in Canada. UK longevity assumptions will be assessed in the second half of 2019.
Maurice Tulloch, pictured, who was installed as chief executive earlier this year, said: “Today is the first step in our plan to make Aviva simpler, more competitive and more commercial. We have strong foundations: excellent distribution, world class insurance expertise, and our balance sheet is robust.
“But there are also clear opportunities to improve. Reducing Aviva’s costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly. We will do all we can to minimise redundancies and support our people through this.
“I am also determined to crack Aviva’s complexity, an issue which has held back our performance for too long. Today’s changes will begin to reduce complexity, cost, and duplication, enabling Aviva to be better at serving our customers and delivering stronger results for our shareholders.
“The sustainability and security of our dividend is paramount. We are focused on improving our performance to grow capital generation and cash-flow.
“On 20 November, we will host a capital markets day that will update on our future strategy and targets.”