Aviva sells Polish arm to Allianz for £2.3bn
AVIVA has sold its final unwanted division just seven months after chief executive Amanda Blanc ignited the insurer’s shake-up.
The FTSE 100 company had been out of favour with investors and analysts who queried its sprawling structure, and a string of slow-moving turnaround plans from successive chief executives had further irritated shareholders.
But Blanc, who joined as Aviva’s first-ever female chief executive last July, has wasted little time in executing her plan to sell off non-essential businesses overseas and focus on the UK, Ireland and Canada.
The firm announced yesterday that it had completed the sale of its Poland business to Allianz for £2.3bn, describing the deal as a ‘significant milestone’ which concluded Aviva’s ‘refocus’. It was the eighth sale since Blanc took over, following disposals in France, Italy, Vietnam, Hong Kong and Singapore. In total Aviva has raised £7.5bn in cash from the deals.
Russ Mould, investment director at AJ Bell, said: ‘For many years shareholders have been eager for Aviva to slim down and focus on the strongest parts of the business and reignite growth.
‘However, no one expected it to shed weight at the rapid pace we’ve seen over the past year as the life insurance industry tends to move at the pace of a sloth, not a cheetah. Achieving multiple disposals in eight months is quite remarkable and it has created a large cash pile that gives the business many options.’ He added that he was pleased to see Aviva being ‘sensible’ with its plans for the cash it has raised, paying off debt, planning for growth and returning some to long-suffering investors.
Blanc, a keen cyclist and Welsh rugby fanatic, said: ‘We have made significant progress with our debt reduction plan and in due course we will make a substantial return of capital to shareholders.’
She took over last year following the departure of several bosses in relatively quick succession. Andrew Moss was ousted in 2012 following a revolt by shareholders disappointed with the company’s share price.
He was replaced by Mark Wilson, who lasted for six years before the board decided it was time for new leadership with a more radical plan for the insurance group. Maurice Tulloch took over in 2019, but lasted just 16 months before stepping down due to a family illness. Rumours were also circulating that investors were unimpressed with the pace of change.
While 54-year- old Blanc’s restructuring has so far moved much faster than her predecessors’, Mould warned there is still a long way to go before Aviva is at the top of its game.
He said: ‘Selling assets is the easy part. Accelerating growth can be harder than you think, and so cash-rich Aviva will need to have some bright ideas otherwise it could soon lose the spring in its step.’
Shares in the insurer edged up 0.3pc to 401.2p yesterday. Since Blanc took over, they have risen 42pc, though some of this was a recovery from its pandemic slump.