INSURANCE giant Aviva’s executive chairman John McFarlane today unveiled a major restructuring which will see 16 business units put up for sale.
A sweeping review of the business has also seen McFarlane appoint fellow Scot David McMillan as director of “group transformation” in a move which could see him as a front-runner to take on the chief executive role vacated by Andrew Moss following a shareholder revolt.
McFarlane, a former non-exec at RBS who stepped up to the full-time chairman’s role at Aviva after Moss left, said a review of 58 business divisions had identified weak performers that would be sold, including the bulk annuities business in the UK.
The former bank chief said the proposals would create “a leaner and more agile” business with a “less layered and bureaucratic management style”. In addition to the 16 businesses flagged for sale, Aviva highlighted 27 business areas that will require significant improvement.
The divisions identified for sale, which include a number of small Italian partnerships and its South Korea division, are thought to account for some £6 billion of the group’s capital, but only contribute operating profit of £300 million a year. It is also selling part of its take in Netherlands-based financial services business Delta Lloyd.
Unveiling the shake-up, McFarlane said he would address concerns flagged by shareholders alongside the disappointment over the company’s share price performance. He said investors found the business difficult to understand and that they felt it had expanded the international scope too far.
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