Aviva's new CEO Blanc promises 'decisive action' in strategy reboot
UK insurer Aviva's new chief executive Amanda Blanc has promised to take "decisive action", including withdrawing capital from non-profitable areas and reinvigorating its focus on its strongest businesses in the UK, Ireland and Canada.
Blanc has been CEO of the insurer for almost one month, having replaced Maurice Tulloch in July.
The insurer said "with the change in leadership, there is a change in approach".
"We will focus Aviva on our strongest businesses in the UK, Ireland and Canada and aim to be the UK’s leading insurer. We are going to focus on those businesses where we have the necessary size, capability and brilliant customer service to generate superior shareholder returns. This is where we will invest and grow. Where we cannot meet our strategic objectives, we will take decisive action and we will withdraw capital," Blanc said in a statement announcing the company's half year 2020 results.
"I have been CEO for one month and I am confident we have many of the ingredients to make Aviva a winner," she added. "From this moment on, we must deliver. Nothing else will do. My focus is making sure it happens and at pace."
Blanc noted that "Aviva’s financial performance in the first half of 2020 was solid". The company generated an operating profit of £1.22 billion in H1 2020, roughly 12 percent drop from £1.38 billion in the same period of 2019, as COVID-19 impacted the number of insurance claims and reduced customer activity level.
General insurance net written premiums (NWP) were £4.75 billion, compared with £4.72 billion in H1 2019. The combined operating ratio for the period was 99.8 percent, versus 96.8 percent in the first half of 2019.
"We must transform our performance and improve our efficiency," said Blanc. "This requires great customer service, stronger innovation and better use of our brand. Our transformation will be underpinned by continuing to manage our balance sheet prudently, reducing debt and increasing our financial resilience."
Furthermore, the group declared an interim dividend of 6p a share, but said it will review the 2019 final dividend and its longer term dividend policy in the fourth quarter of the year "with the objective of a sustainable pay-out and lower levels of debt".
