Aviva to offload 16 units to save costs

City A.M. Reporter
Insurer Aviva said it would sell or close 16 underperforming businesses as part of a strategic shake-up aimed at bolstering its finances and reinvigorating its flagging share price.

The businesses earmarked for disposal include its South Korean arm and its British large-scale bulk purchase annuity unit, and contribute £300m to after-tax profit, Aviva said.

The insurer, whose weak stock market performance led to the removal of chief executive Andrew Moss in May, said it had identified a further 27 businesses which "require significant improvement", including its Irish general insurance arm.

The disposal plan is the culmination of a two-month scrutiny of Aviva's 58 businesses launched by executive chairman John McFarlane, who took day-to-day control of the group after Moss quit on 8 May.

"Things are tough and the environment is challenging. However, I am confident we will be successful," he said in a statement.

Aviva stock has fallen 35 per cent in the past year, against a 10 per cent decline in the Stoxx 600 European insurance share index.