Aviva plans £400m savings in two years

INSURANCE company Aviva has announced plans for £400m in savings over the next two years, half of which will come from efficiency gains, and half from cost savings. It has also said that it will close its final salary pension scheme, which has 7,600 members, something that will save £50m a year. Several hundred jobs will also go in its Canadian business, although there will be no job-losses in the UK.

Chief executive Andrew Moss said: ‘We will continue our drive to create a simplified, more modern way of doing business, which will both improve our efficiency and reflect customers’ changing preferences.”

Sales in the UK were up 26 per cent in the UK, to £2.4bn, taking domestic sales to £12.3bn for the first three quarters of 2010 – a 16 per cent increase on 2009. In the UK sales of long-term savings products were up 22 per cent and, globally, new life and pensions sales were £25.6bn, up from £24bn on the same period last year.

The company said that going forward it will concentrate on eight key European markets, plus North America, China, and India, while it will pull out of low return markets, such as Taiwan.

“As we look to the next phase of our growth, Aviva will sharpen its geographic focus and deepen its position in its key markets,” Andrew Moss said.

Aviva’s global business continues to be uneven, with total sales in North America up just one per cent and life and pensions sales down two per cent, while in Asia Pacific sales were up 24 per cent and life and pensions sales increased by 46 per cent.