6 June 2019 13:30
The new chief executive ofAviva plc, Maurice Tulloch, today announced a significant restructuring of the group. The company intends to reduce the expenditure of 300 million pounds sterling per year by 2022, which includes the elimination of 1, 800 jobs by 2021.
The communications officer ofAviva Canada, Fabrice De Dongo, has not been able to identify to what extent these measures will affect the canadian operations. He said the company will provide more details tomorrow.
Reduce the complexity of Aviva
“The measures announced today are the first step in our plan to make Aviva simpler, more competitive and more commercial. We have a solid foundation : an excellent distribution, an expertise in the field of insurance world-class and a strong balance sheet. But there are also obvious opportunities for improvement. Reduce the cost of Aviva is essential in order to remain competitive, which involves hard decisions and job losses that I do not take lightly. We will do everything in our power to reduce the redundancies to a minimum and support our staff in this process “,
Mr Tulloch says that these changes are intended to reduce the complexity that slows the performance of Aviva for too long, ” the costs and duplication.
“The sustainability and the security of our dividend is of primary importance. We focus on improving our performance to increase the generation of capital and cash flow “
Separation of life insurance and damage
In the United Kingdom, the structure of activities of insurance changes. Thus, rather than having a division of insurance, combining the life insurance and damages, and a digital division, the life insurance has its own division and damage insurance too. Activities direct digital are integrated with those of damage.
“This will enable greater accountability and greater management focus on the core activities of life insurance and casualty insurance in the United Kingdom,” says Aviva.
Colm Holmes, chief executive officer of Aviva Canada, has been promoted to the position of chief executive officer of the insurance division of damages. Angela Darlington, chief executive officer of the uk business of life insurance.
The results of the group
The results of Aviva plc, to date, are “consistent with those of 2018,” says the insurer. The performance of the sectors of the savings and the management of assets are lower due to weak investment markets. These are, however, offset by growth in the regions of Europe and Asia, combined with the progress made on the strategic repositioning in Canada.
The company will hold a day of financial markets in the next 20 November in order to make the point about the strategy and its objectives.
Warning for Aviva
The analysis firm GlobalData has issued a warning to the company shortly after the announcement. Yasha Kuruvilla, senior associate for the practice of insurance with the firm, points out that, although reducing expenses is welcomed by shareholders, it is essential that the customer experience, Aviva is not affected.
“Aviva has not specified the sectors that will be affected by job cuts, but indicated that they will be done on a global scale. The company must ensure that its cuts to employment does not lead to fewer points of contact for the customers during the purchase of police or a claim, especially for sensitive products such as life assurance or critical illness. This can have a negative effect on the customer experience and affect its market share, ” he explains.