SHARES in troubled insurer Aviva rose 7.2 per cent yesterday as investors reacted positively to signs that the company could be on the mend.
The business, which last year lost its chief executive in a shareholder rebellion following a prolonged period of underperformance, unveiled a healthy 18 per cent rise in new business sales to £191m during the first three months of the year.
New chief executive Mark Wilson said yesterday’s figures were the “first steps towards delivery” of the company’s radical turnaround strategy, which has seen the firm offload underperforming divisions around the world.
But he admitted there was a long way to go yet: “I am conscious of the challenges and do not want to set expectations at an unrealistic level. Progress so far has been satisfactory and there is a great deal more we need to do for our shareholders.”
The company has aggressively targeted its cost base, reducing quarterly overheads by a tenth to £769m over the course of the last year. This has involved cutting out swathes of middle management and sacking thousands of workers.
Earlier this week Aviva angered unions when it said 600 UK roles would be transferred to India. It has also cut its generous redundancy packages, suggesting more departures could be on the way.
In addition to cutting costs the company saw strong performances by its UK Life and Asian divisions.
Despite yesterday’s share price rise the company’s stock remains in the doldrums. While the FTSE 100 has almost surpassed its pre-cash peak, Aviva shares have flatlined over the last five years.