‘Aviva deal could be good news for Norwich staff’
- Credit: © ARCHANT NORFOLK PHOTOGRAPHIC
Industry analysts last night said Aviva's merger with Friends Life could turn out to be good news for the insurance giant's 5,500 workers employed in Norwich.
As it was confirmed yesterday morning that Aviva was to buy its rival in a deal worth £5.2bn, shares in both companies saw an immediate rise.
The two companies confirmed details of the merger a week after disclosing that they were in advanced talks about creating the UK's leading insurance, savings and asset management business by number of customers.
Aviva's group chief executive officer Mark Wilson admitted that the tie-up, expected to generate annual cost savings of £225m by the end of 2017, might result in job losses.
But despite speculation that up to 2,000 jobs could go, the company refused to comment further at this stage.
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Shareholders are expected to formally endorse the merger in March and it is understood that the detailed impact on jobs and estate will only be worked out after that stage.
However, investment manager Richard Larner, in charge of Brewin Dolphin's Norwich office, said the deal might not have negative consequences for Aviva's Norwich staff.
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He said: 'One of the positives is that the bulk of Aviva's employees in Norwich are involved in general insurance and Friends Life does not have any of that activity, so the Norwich workforce is unlikely to be affected by any rationalisation of staff.
'It will also be hoped that Friends Life customers will be a source of new business for Aviva; I can see an expansion in general insurance so that may be the biggest effect in terms of Norwich.'
He said it was also more of a takeover than a merger - 'Friends Life is quite a lot smaller' - and Aviva would be intent on continuing to use its own systems. The implication of that was that Aviva staff would do a lot better.
Adam Revell, a senior financial planner at Norwich-based insurance and financial services company, Alan Boswell Group, agreed that 'cross selling' was a key motive for the merger and that could benefit Norwich staff.
Aviva employs around 28,000 staff worldwide including 12,000 in the UK, while Friends Life employs 3,500 staff largely in offices in London, Manchester, Bristol and Salisbury.
Friends Life was created in 2011 following the amalgamation of Friends Provident, the majority of Axa UK Life and Bupa Health Assurance.
The move by Aviva comes after a resurgence in its fortunes under Mr Wilson, who took charge nearly two years ago after predecessor Andrew Moss was ousted in the wake of a humiliating shareholder revolt over his pay and the faltering pace of the business.