Aviva undergo restructuring, shedding 16 businesses
Aviva is set to undergo significant business restructuring, shedding 16 'non-core' underperforming companies in order to boost revenue and enhance its share price performance.
John McFarlane, the new chairman at Aviva, released a statement to its shareholders promising "a leaner and more agile business". Some of the businesses to be jettisoned are its South Korean arm, as well as putting a hold on any new business at its UK bulk-buying annuity unit.
The moves are in an attempt to cut costs by £400 million by 2014, with 27 other businesses being highlighted as requiring "significant improvements". Aviva's share price has fallen 35 per cent over the past year, leading to chief executive Andrew Moss being ousted from the company.
Mr McFarlane's first move was to launch a review of the group's 58 businesses. The review revealed that the shareholders thought the group was "difficult to understand", too complex and too exposed to the eurozone.
He said: "I genuinely believe our new approach will largely address stakeholder concerns.
"Although we will need patience particularly from shareholders, as our plans are subject to execution risk and to the economic environment."