Shake-up in store for Aviva as boss makes sud­den exit

Tough talk­ing Amanda Blanc re­places Mau­rice Tul­loch at the helm of un­der-pres­sure in­surer

The Daily Telegraph - Business - - Front Page - By Michael O’Dwyer

AVIVA has an­nounced a sud­den change of chief ex­ec­u­tive that could spark a rad­i­cal over­haul or even a break-up of the £11bn in­surer.

Amanda Blanc, who joined Aviva as a non-ex­ec­u­tive di­rec­tor in Jan­uary, has taken over with im­me­di­ate ef­fect – re­plac­ing Cana­dian boss Mau­rice Tul­loch, who stepped down from the FTSE 100 firm af­ter only 16 months in the role due to an ill­ness in his fam­ily.

Ms Blanc pre­vi­ously ran Zurich’s Euro­pean, Mid­dle East and African op­er­a­tions, and did the same for Axa in the UK and Ire­land. She promised to de­liver a rapid strate­gic shake-up of the firm fol­low­ing years of poor share price per­for­mance and in­vestor fears that with 32,000 staff in 16 coun­tries, it was an un­man­age­able be­he­moth.

She said: “I’m not a busi­ness-asusual per­son and I haven’t come here to do a busi­ness-as-usual job.”

Aviva dis­ap­pointed in­vestors last year af­ter de­cid­ing not to pur­sue ei­ther a break-up or a bolder strat­egy of sell­ing off sig­nif­i­cant chunks of its busi­ness to gen­er­ate cash for share­hold­ers.

Ms Blanc, who is a for­mer chair­man of the As­so­ci­a­tion of Bri­tish In­sur­ers, promised to look at all op­tions. Shares rose 3.6pc to 283.4p.

She said: “I have been on the Aviva board since the start of this year and have a good un­der­stand­ing of where the busi­ness has its strengths and what ac­tions we should take across our port­fo­lio. We do not have a day to waste.”

Aviva has op­er­a­tions in the UK, Europe, Canada and Asia. It sells gen­eral in­sur­ance cov­er­ing cars, homes and travel, as well as life in­sur­ance and pen­sions. Its ri­vals in­creas­ingly spe­cialise in ei­ther gen­eral or life in­sur­ance, or focus on a spe­cific re­gion.

Ms Blanc did not in­di­cate whether she would cut the com­pany’s div­i­dend as three of her four im­me­di­ate pre­de­ces­sors had. An up­date is due later this year af­ter the com­pany with­drew its £839m pay­out in April fol­low­ing pres­sure from the Bank of England as fears grew over Covid-19.

Barrie Cornes, an an­a­lyst at stock­bro­ker Pan­mure Gordon, said: “I think the div­i­dend will be re­based at a re­al­is­tic level, which will give Amanda an in­creased scope to do dif­fer­ent things.”

Ms Blanc’s ap­point­ment comes weeks af­ter Aviva con­firmed Ge­orge Cul­mer, Lloyds’ for­mer fi­nance boss, as its new chair­man. Mr Cul­mer said there had been enough time to con­duct a thor­ough re­cruit­ment process, in­clud­ing an as­sess­ment of ex­ter­nal can­di­dates. He praised Ms Blanc for a track record of de­liv­ery.

She will be paid a ba­sic an­nual salary of £1m with a bonus of up to 200pc and long-term share awards worth up to 300pc. To­gether with a 14pc pen­sion, her max­i­mum pos­si­ble an­nual pay will be more than £6.1m. Di­rec­tor bonuses are on hold un­til the div­i­dend re­sumes.

Mr Cul­mer thanked Mr Tul­loch for his work at Aviva since join­ing in 1992. He won the top job last year af­ter a long search for a suc­ces­sor to Mark Wil­son, who was ousted in 2018.

Mr Tul­loch has been placed on gar­den­ing leave for six months and will con­tinue to re­ceive his nor­mal salary and pen­sion con­tri­bu­tions. His out- stand­ing share awards and bonuses are ex­pected to pay about £2m, sources close to Aviva said.

The in­sur­ance in­dus­try has suf­fered a se­ri­ous blow to its rep­u­ta­tion dur­ing the pan­demic for re­fus­ing to pay out to most com­pa­nies which claimed on their busi­ness in­ter­rup­tion poli­cies fol­low­ing the Covid-19 out­break.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.