AVIVA

(AV.) 467.9p

Shares - - GREAT IDEAS UPDATES -

Loss to date: 8.3% Orig­i­nal en­try price: Buy at 510.5p, 14 De­cem­ber 2017

THE PLANNED DE­PAR­TURE of chief ex­ec­u­tive Mark Wil­son next April could help Aviva (AV.) take the step from re­ha­bil­i­ta­tion to ac­cel­er­ated growth and sup­port a share price which has drifted since we added the com­pany to the Great Ideas port­fo­lio to­wards the end of 2017.

Af­ter a pe­riod in the dol­drums at the be­gin­ning of this decade, the in­sur­ance firm has been sim­pli­fied un­der Wil­son’s lead­er­ship and both the fi­nan­cial per­for­mance and bal­ance sheet have been dras­ti­cally im­proved.

How­ever, it is no­table that the com­pany has un­der­per­formed its ri­vals un­der Wil­son in share price terms, up 27% since he took over in Jan­uary 2013 com­pared with a 94% ad­vance for Pru­den­tial (PRU) and a 78% rise for Le­gal & Gen­eral (LGEN) over the same pe­riod.

Wil­son will leave in six months’ time to en­sure an or­derly suc­ces­sion. Non-ex­ec­u­tive chair­man Adrian Mon­tague will take up ex­ec­u­tive re­spon­si­bil­i­ties aided by a com­mit­tee of se­nior di­rec­tors.

Shore Cap­i­tal an­a­lyst Paul De’Ath says: ‘The key ques­tion is whether Mr Wil­son’s re­place­ment will come from out­side the group or per­haps could be one of the three ex­ist­ing ex­ec­u­tive di­rec­tors. As was seen with Mr Wil­son him­self, an ex­ter­nal CEO is likely to bring a much greater change in strat­egy and di­rec­tion for the group.’

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