Aviva chief expects Square Mile inquisition over growth strategy

Click to follow
The Independent Online

Andrew Moss, the recently installed chief executive at Aviva, Britain's biggest insurer, will this week face his greatest test to date when he is grilled by analysts over the company's strategy at a meeting in New York.

Mr Moss, Aviva's former finance director who succeeded Richard Harvey in July, will have to persuade a sceptical audience of the merits of his growth plans.

In August, Mr Moss tried to quell talks of acquisition plans following the company's abortive £17bn bid for Prudential in 2006, promising instead to deliver profits by sweating the company's existing businesses harder.

But many in the City are unconvinced, with Aviva's share price meandering over the past year. Shares in the group closed on Friday at 778p a share – some 70p short of February's annual high.

Tony Silverman, insurance analyst at ratings agency Standard & Poor's, said Mr Moss would have to explain the direction in which the company is heading: "He really is looking for a strategy and will have to come up with something to impress. Aviva has got lucky with regulatory changes in America that have played into its hands. Analysts will want more than that, though."

Kevin Ryan, insurance analyst at ING, who has a "buy" recommendation on Aviva, said the chief executive could face a rough ride: "It could be interesting. Mr Moss needs to convince the market that the US is seriously cooking with gas and generally moving ahead strongly."

The presentation will come weeks after Aviva's rising star, Tidjane Thiam, executive director of the firm's European business, quit to join rival Prudential as finance director. He takes up the position next April, replacing Prudential's long-serving finance director, Philip Broadley. A replacement for Mr Thiam has yet to be announced.

Mr Moss, who fought off Aviva's then UK head Patrick Snowball for the top job at the global firm, has endured a baptism of fire since taking the helm, fending off rumours in the City that hedge funds were circling the group mooting the prospect of a break-up.

On his arrival, he sought to stamp his authority by changing the company's public relations adviser and ditching one of its corporate advisers, Hoare Govett.

Affairs at Aviva are all the more in focus following a renaissance in Prudential's fortunes after a difficult year. Its shares closed on Friday at 770.5p, up from an August low of 620p.

"There are clearly still issues at Prudential but things are definitely improving," said Mr Silverman. "The UK business lags its Asian counterpart very badly. But the Pru is my strongest buy in the sector."

Comments