Aviva boss ready to spell out strategy

Published on 05/08/2012 00:00

AVIVA executive chairman John McFarlane is expected to give more details this week on his radical plans to restructure the insurance giant.

McFarlane, who took over after chief executive Andrew Moss was ousted in May, will unveil details of the disposal programme outlined last month. He will sell or close more than a quarter of its businesses in a widely-welcomed attempt to boost performance.

Most of these 16 “non-core” businesses have yet to be identified, though Aviva has confirmed that it will offload its 49 per cent stake in a Taiwanese joint venture.

Its South Korean arm is also set for disposal, while part of its holding in Dutch insurer Delta Lloyd has already been sold.

However, the future of the group’s Aviva USA operation is widely thought to be key. Speculation is rife that the business is set to be sold at substantially less than the £1.8 billion paid for it in 2006.

Marcus Barnard, an analyst at Oriel Securities, said a deal at that level would be a significant blow for the firm. However, he doesn’t believe there has yet been enough time for Aviva to complete a major disposal.

Barnard expects Aviva to post interim profits of slightly more than £1bn, in line with consensus forecasts.

He said: “They will try to show a clean set of figures, but until the rest of this is settled it is not going to mean a lot.”

Matthew Preston, an analyst with Berenberg Bank, said Aviva would be limited in what it can reveal until deals have been signed off.