Aviva's new chairman, John McFarlane, unveiled a radical overhaul of the troubled insurer yesterday, criticising the previous management along the way.
The executive chairman took day-to-day control in May after the chief executive, Andrew Moss, bowed to shareholder pressure and quit. It was Mr Moss who promised to deliver "one Aviva, twice the value" in 2007, since when the shares have halved.
Mr McFarlane said of this strategy: "It has not happened. We are moving away from those aspirational things. We will narrow our focus. We intend to be very different going forward."
He has already identified 16 poorly performing businesses out of a total of 58 which need to be sold. They are thought to include the South Korean arm, its UK large-scale, bulk-purchase annuities business, and its 41 per cent stake in the Dutch insurer Delta Lloyd. The US business may also be up for grabs.
Acknowledging investors' anger, Mr McFarlane said: "Shareholders think our business is too complex, that our capital levels are weaker and more volatile than our peers. We have had too many changes of strategy that haven't delivered."
Restructuring costs at the company have hit £1.3bn in the last five years, he disclosed.
There is also a management shake-up which sees the creation of the "office of the chairman", which will meet weekly. Those in it are Pat Regan, Trevor Matthews, David McMillan and Simon Machell.
Mr Regan, the finance director, is seen as a leading internal candidate to be chief executive.
Mr McFarlane ruled himself out, but believes the new man, or woman, will not be in place until the start of next year. Headhunters at Spencer Stuart are sounding out candidates.
Insurance companies are notoriously complex, something Mr McFarlane said should change. He attacked Aviva's past financial reports as "cumbersome", "difficult to understand," and "confusing".
Shrinking the business and shaking up mid-level management will be done before the next chief executive arrives, he said.Reuse content