Aviva is considering splitting its UK business into two parts, as it prepares to unveil a big shake-up next week.
According to FT Adviser’s sister newspaper the Financial Times, this could mean one part of the business will contain the life insurance division, while the other would hold non-life insurance, such as home and car cover.
Maurice Tulloch, who was appointed chief executive at the insurer in March, said he wants to "re-energise" the 323-year old British company.
When Aviva announced the departure last month of UK chief executive Andy Briggs it stated there would be a "review of the UK businesses to ensure the appropriate management structure to build on that success for the future".
The insurer is due to update investors on Mr Tulloch’s plans on June 6.
The new CEO is believed to want to simplify the group, saying at last week’s annual meeting it was "still too complex".
Splitting the UK business would fit in with Mr Tulloch’s wish to simplify the group’s structure, and would enable it to focus more closely on the fundamentals of each division, such as underwriting and pricing.
The company’s incurred costs have been rising in recent years and the new CEO told last week’s annual meeting that its "cost to income ratio is higher than it ought to be".
However, the move to break up the group would reverse Aviva’s 2017 decision to merge its two main businesses.
Mark Wilson, CEO at the time, wanted to turn the company into what he called a "true customer composite", able to sell a wide range of insurance products to the same consumers.
Aviva declined to comment on this matter.
maria.espadinha@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
