Aviva’s McFarlane pledges allegiance to IFAs
Aviva is gearing up to leave some markets as the firm undertakes a strategic review of its business, but its executive deputy chairman has pledged the company’s allegiance to advisers through the retail distribution review.
John McFarlane has told the markets: “We have about 45 profit centres in the group and we are looking at various factors that will help us decide what to invest in and what to leave.
Mr McFarlane said: “I am not prepared to go into any detail yet but we will be making announcements in June.
“We are cautiously optimistic about RDR despite the hurdles facing IFAs and our adviser charging models are well on track.”
Responding to a question about whether it was justifiable to press ahead with changes without a chief executive in place after Andrew Moss stepped down earlier this month, Mr McFarlane said: “If you think we should not do anything until we get a CEO in place down the road, you would be foolish. We have to generate shareholder value.
“We have already seen some fantastic people, so we are confident this is the right direction.”
He was speaking as the company unveiled its first-quarter results. It asset management division has seen £1bn of inflows in just the first quarter, while general insurance and health net written premiums were level with last year at £2.2bn.
He vowed to continue to increase its level of capital surplus and to decrease its level of volatility.
Aviva’s estimated Insurance Group Directive solvency surplus - capital employed less regulatory capital requirement - at 31 March was £3.2bn, ahead of the full year 2011 position of £2.2bn and in line with the position at 29 February 2012 of £3.3bn.
However, long-term savings sales were down 5 per cent at £7.5bn, compared with £7.8bn over the same quarter 2011.
Mel Kenny, director for London-based Radcliffe & Newlands, said he did not question the firm’s commitment to IFAs, but regarding RDR, he said: “To me, the much over-used and worthless phrase ‘cautiously optimistic’ these days means ‘on a wing and a prayer’. A new chief executive will no doubt make decisions about where to exit.”