Member Article

Aviva braces shareholders for loss on US sale

Norwich-based international insurer, Aviva gas warned shareholders that the sale of its US arm will bring losses.

The company said it was preparing to sell its US life and annuities business, and that a sale would “come at a substantial discount to IFRS book value.”

In a statement, Aviva said the sale was worthwhile because of the significant capital it would release.

Chairman John McFarlane also suggested the company had been hampered by bureaucracy and collective decision making.

He said: “Culturally the organisation has been more used to collective decision making and has moved more slowly as a result.

“This initially inhibited progress on some of the programmes possibly exacerbated by an unwieldy centre and support infrastructure, with more bureaucracy than desirable. Although it will take time to change this, the pace of change is accelerating and we are beginning to make real progress.”

Mr McFarlane went on to say that trading conditions remain difficult and results painted a mixed picture across the Group.

He added: “We nevertheless have strong positions in the UK, Canada, France and Singapore and our performance has been good in these markets.

“In our life business in Spain and Italy markets are tough, driven by the external economic environment, with new business volumes considerably reduced. In Ireland, while a number of good actions are underway to improve performance, the results are not yet acceptable.”

In the third quarter, Aviva reduced holdings in Delta Lloyd and announced the sales of its Sri Lankan business. The firm also said they were working to “turnaround” 27 business cells that had showed mixed performance.

This was posted in Bdaily's Members' News section by Tom Keighley .