Aviva could axe 15 divisions as part of overhaul

Kasmira Jefford
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INSURANCE GIANT Aviva is expected to announce a radical overhaul of its business this week including proposals to sell-off or close up to a fifth of its operations.

John McFarlane, the Aviva executive chairman who has also been acting as chief executive since Andrew Moss resigned, will present the findings of a month-long strategic review to investors on Thursday. He is expected to reveal that as many as 15 business divisions out of 58 identified by the group have been earmarked for disposal or closure.

It is unclear which divisions have been targeted but analysts have pointed to a sell-off of Aviva’s US insurance arm and a further selling-down in Dutch insurance provider Delta Lloyd as “critical” to its survival.

Macfarlane is also understood to have reduced the number of management layers, making a number of managers redundant in an attempt to reduce costs. The review, which is being overseen by Aviva’s finance chief Patrick Regan, comes after two thirds of investors rejected Moss’s £2.7m pay package at its annual general meeting in May, prompting him step down.

The rebellion was part of a wider protest against a 60 per cent drop in the share price since Moss became chief executive in 2007. Aviva declined to comment yesterday.