Insurance giant Aviva said yesterday it was ahead of plan with moves to combine Friends Life after its £6.5 billion tie-up, but stressed the integration was “nowhere near complete”.
The life and pensions group, which sealed the industry’s biggest merger since 2000 when it snapped up Friends Life in April to create a business with 31,500 employees, said it had already notched up £63 million of cost savings.Aviva revealed earlier this year that it expects to slash 1,500 jobs, almost 5 per cent of its workforce, and a third of its offices as part of its plans to make £225m of annual savings from the deal by the end of 2017.
Chief executive Mark Wilson said the group was moving to a new phase under its turnaround programme as it posted slightly better-than-expected half-year earnings of £1.17bn – up 9 per cent on a year earlier.
He said: “After three years of turnaround we are now moving to a different phase of delivery. We have improved the balance sheet, simplified the group and we are now transforming our business.
“The Friends Life integration is ahead of schedule and we have delivered £63m of run-rate synergies after three months. This is encouraging but nowhere near complete.”
The group revealed a 12 per cent fall in UK individual annuity sales to £46m in the first half following recent pension reforms.
l Swiss group Zurich said it was determined not to overpay for RSA Insurance amid speculation it is working on a lower-than-expected offer for the More Than owner.
RSA saw shares come under pressure as figures revealing an 84 per cent surge in half-year earnings were overshadowed by reports suggesting Zurich is considering an offer worth £5.4bn, against hopes for at least £5.6bn.