Aviva boss talks down scale of recovery at UK insurance giant

AVIVA’S share price hit a two year high yesterday – but the company’s new chief executive insists he has merely made “satisfactory progress” on his turnaround plan.

First half pre-tax operating profits at the FTSE 100 insurer were up five per cent to over £1bn, with the stock closing up 7.6 per cent.

Mark Wilson, who took control of the company in January, said he now wanted to see year-on-year improvements across the business, especially at its underperforming Aviva Investors arm.

But the turnaround plan could still result in more job losses. Earlier this year Wilson announced plans to sack six per cent of the global workforce and yesterday would not directly rule out further departures in 2014.

“This year we’ve been very clear that we’ve got a 2,000 reduction [in headcount] and we want to get through that quickly,” he told City A.M. “A key part of what we’re trying to do is retrain and reallocate people to things like digital distribution and predictive analytics. I want to get through those major restructurings as soon as we can.”

Wilson also said he had “high expectations” for Aviva Investors following the hire of Euan Munro as the division’s new chief executive. He also hinted at a new direction for the unit by praising Munro’s “fixed income and multi-asset background”.

Eamonn Flanagan, an analyst with Shore Capital, reiterated his ‘sell’ rating: “Aviva’s shares appear to be defying both gravity and the CEO’s exhortations over the group’s problem areas and unresolved issues.”