Aviva rejig will be 'business as usual'

The “vast majority” of Aviva staff will carry on “business as usual” when the firm's UK life and general insurance operations come together under single chief executive in the new year, it emerged last night .

Mark Hodges, chief executive of Aviva's life division, will take on the new top job in the UK from January, when his counterpart in the firm's general insurance operation, Igal Mayer, takes over the running of the insurer's operations in North America.

Yesterday Mr Hodges said he was still working on appointing a new “leadership team” in the UK, but reassured staff that there would be no abrupt changes of direction.

Mr Hodges said he could not rule out future job cuts, but added: “For the vast majority of our staff, it's a question of business as usual and our customer-facing staff especially shouldn't feel much of an impact of these changes.”

His comments came as Aviva revealed that UK life and pension sales in the first nine months of this year had fallen by 25pc compared to the same period a year ago - although the firm increased its market share from 10.4pc to 10.8pc.

But the insurer said this reflected in part the “challenging” economic climate and a focus on “writing profitable business rather than volume”.

Mr Hodges rebuffed City speculation that Aviva would use the proceeds of the partial sale of its Dutch Delta Lloyd operation to buy other insurers - and ruled out bids for the insurance arms of Royal Bank of Scotland, Direct Line and Churchill.

“It's good we have the proceeds coming in from Delta Lloyd, it's good the solvency of the group is very strong now,” Mr Hodges said.

“We have a number of ways of redeploying that capital and there are organic growth opportunities - whether in distribution or new business. But third on the list, there are inorganic opportunities - bolt-on opportunities in our markets around the world.

“But the real sentiment is that it's business as usual - and the idea that we're on some major acquisition trail is frankly misleading.”

He added: “Specifically on Direct Line and Churchill, they've been up for sale before, we've ruled ourselves out before. It may be a non-starter because of competition rules in any place. But most of the value in those businesses is in the brands. Having moved to the Aviva brand, why would you buy other branded organisations?”

On the executive reshuffle at Aviva, Mr Hodges said: “The two businesses [life and general insurance] have been on consistent path. They've both been on a programme of rationalising legacy systems, simplifying processes for consumers, modernising the product set and using e-commerce more. In a difficult economic environment, where capital conservation is critical, both have been focussed on profitable business.

“We have to organise our business around the needs of our customers. There are elements of the businesses that are different and you wouldn't necessarily want to do in a common way. I think having had the benefit of working in both businesses, I think there are some things that are very similar. Some of their aspirations and ambitions are similar. My job is to create an environment where we have a profitable and growing business where we're giving great service to our customers. I don't see it requiring a change in strategy for either business, but there are some areas where there are opportunities - I think about our distribution partners, the ways we interact with customers, such as e-commerce, there are opportunities to improve the whole Aviva experience across the UK.

“It won't be a change of direction, but some things will move on.”