Aviva braces for US sell-off and a new chief executive

 

Decision time is looming for Aviva's chairman John McFarlane, who yesterday admitted his company is too sluggish and bureaucratic.

The tough-talking Scot warned investors to brace themselves for a heavy loss on its United States arm, which is expected to be sold for about £1bn over the next few weeks, half of what Aviva paid for it in 2006.

The company is understood to have received approaches from Apollo, Harbinger Capital and Guggenheim Partners.

Mr McFarlane said Aviva was also in the final stages of appointing a successor to Andrew Moss, the chief executive who was ousted this year following an embarrassing pay revolt at the company's AGM.

The decision is expected imminently with finance director Pat Regan the bookies' favourite.

"Individuals, internal and external, have gone through rigorous external testing," Mr McFarlane said.

"The non-execs must interview the candidates and they are still taking place this week. I wouldn't look for an imminent decision, but I am confident we will get the right person to head the organisation."

Mr McFarlane said he planned to cut the amount of red tape at the company.

"Culturally the organisation has been more used to collective decision making and has moved more slowly as a result, with more bureaucracy than desirable," he added.

Aviva shares rose 1.8p to 330.3p yesterday despite the company reporting a 5 per cent fall in sales during the first nine months of the year to £28.9bn. Despite this, its combined ratio remained below 100 per cent, meaning Aviva is taking in more in premiums than it pays out in claims.

Mr McFarlane is overseeing a strategic overhaul, which will see the company cut staff, sell 16 businesses and seek "significant improvement" in 27 others to reverse the company's poor share performance.

He has vowed to turn Aviva into a "leaner, more agile beast" after years of underperformance under Mr Moss' stewardship.

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