Tulloch unveils plan
Aviva restructure falls short of investor expectations
New shape: the insurer has restructured
Aviva’s new chief executive yesterday pledged to fix years of underperformance but left investors unimpressed by his slimmed down structure.
The company, which has 3,000 employees in Scotland, is reorganising into five divisions, following moves by other big insurance and asset managers to reshape their business.
Aviva is folding its fund management business Aviva Investors into a broader investments, savings and retirement division. The other four new divisions are UK life, Europe life, Asia life, and general insurance.
The insurer – which has 33 million customers worldwide – is bailing out of its Hong Kong business, Blue, selling its stake to joint venture partner Hillhouse Capital for an undisclosed sum.
Earlier this week it said it was keeping its Singapore operation following a review of its Asian businesses. It is also keeping its joint venture in China.
However, the changes fell short of investor expectations for a broader change in strategy and the markets were left underwhelmed.
Maurice Tulloch: determined
Investors were hoping for a bolder statement from Scots-born Maurice Tulloch who took over as chief executive from Mark Wilson earlier this year.
In June he said he was “determined to crack Aviva’s complexity, an issue which has held back our performance for too long”.
Yestereday he admitted the FTSE 100 behemoth has struggled to stand out from the crowd, amid fears it is too thinly spread with dozens of unimpressive operations around the world.
There had been talk of the company offloading its smaller European operations such as France or Italy and a greater focus on the UK.
The announcement follows Prudential divesting its M&G business, which recently floated, while Old Mutual broke up into four parts and Standard Life sold off insurance business to Phoenix following its merger with Aberdeen Asset Management.
Aviva said it was committed to its progressive dividend policy and saw 2019 operating profit in line with management expectations, following around £300-400 million in “management actions”.