Aviva sets aside £100m for clients’ compensation claims
Tuesday 24 December 2013
Aviva has been forced to set aside almost £100m after two former workers in its fund management arm breached its trading policy.
The FTSE 100 insurer discovered the ex-employees had broken rules between 2006-2012 and has since asked PricewaterhouseCoopers to review parts of the Aviva Investors division.
Its customers have been notified and could now receive compensation.
“During 2013 the company identified that two former employees did not comply with Aviva Investors’ dealing policy relating to the allocation of gilt trades,” the company said. “A provision of £92m has been recognised to reflect the expected compensation... in respect of these breaches.”
Sources close to the group said there will be no impact on its overall finances and that the City regulator had been notified.
The news, first reported by The Insurance Insider magazine, comes after a successful year for Aviva under its new chief executive Mark Wilson.
The company, formerly known as Norwich Union in the UK, parted ways with its former chief executive Andrew Moss last year, following an embarrassing revolt over pay at its 2012 AGM. Since then the group has outlined plans to exit underperforming businesses, cut 2,000 jobs and take out £400m in costs.
Aviva Investors, formerly known as Morley Fund Management, had £246bn of assets under management as of 30 September this year, although Mr Wilson will hope for a revival in its fortunes under new boss Euan Munro, who starts next month.
µ The AA has appointed Chris Jansen as its new chief executive ahead of key few months in which experts have predicted it could be listed or sold. Mr Jansen, who has held senior positions at British Gas and British Airways in the past, will replace Andrew Strong, who led the business for six years.
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