UK Edition
Aviva signals radical overhaul as boss makes sudden exit
New chief Amanda Blanc says she has not come to do a 'business as usual' job
Aviva has announced a sudden change of chief executive that could spark a radical overhaul or even a breakup of the £11bn insurer.
Amanda Blanc, who joined Aviva as a non-executive director in January, has taken over with immediate effect - replacing Canadian boss Maurice Tulloch, who stepped down from the FTSE 100 firm after only 16 months in the role due to an illness in his family.
Ms Blanc previously ran Zurich’s European, Middle East and African operations and did the same for Axa in the UK and Ireland. She promised to deliver a rapid strategic shake-up of the firm following years of poor share price performance and investor fears that with 32,000 staff in 16 countries, it is an unmanageable behemoth.
She said: “I’m not a business as usual person and I haven’t come here to do a business as usual job.”
Aviva disappointed investors last year after deciding not to pursue either a break-up or a bolder strategy of selling off significant chunks of its business to generate cash for shareholders.
Ms Blanc, who is a former chair of the Association of British Insurers, promised to look at all options. Shares rose 3.6pc to 283.4p.
She said: “I have been on the Aviva board since the start of this year and have a good understanding of where the business has its strengths and what actions we should take across our portfolio.
“We do not have a day to waste.”
Aviva has operations in the UK, Europe, Canada and Asia. It sells general insurance covering cars, homes and travel as well as life insurance and pensions. Its rivals increasingly specialise in either general or life insurance or focus on a specific region.
Ms Blanc did not indicate whether she would cut the company’s dividend as three of her four immediate predecessors have done. An update is due later this year after the company withdrew its £839m payout in April following pressure from The Bank of England as markets crashed and fears grew over a spike in claims from Covid-19.
Barrie Cornes, an analyst at stockbroker Panmure Gordon, said: “I think the dividend will be rebased at a realistic level, which will give Amanda an increased scope to do different things with the business."
Ms Blanc’s appointment comes weeks after Aviva confirmed Lloyds' former finance boss George Culmer as its new chairman.
Mr Culmer said there had been enough time to conduct a thorough recruitment process, including an assessment of external candidates. He praised Ms Blanc’s for a track record of delivery.
She will be paid a basic annual salary of £1m with a bonus of up to 200pc and long term share awards worth up to 300pc. Together with a 14pc pension, her maximum possible annual pay will be more than £6.1m. Director bonuses are on hold until the dividend is resumed.
Mr Culmer thanked Mr Tulloch for his work at Aviva since joining in 1992. He won the top job last year after a long search for a successor to Mark Wilson, who was ousted in 2018. Mr Wilson had in turn replaced Andrew Moss, who left in 2012 following a shareholder revolt over his pay.
Canadian Mr Tulloch has been placed on garden leave for six months and will continue to receive his normal salary and pension contributions. His outstanding share awards and bonuses are expected to pay about £2m, sources close to Aviva said.
The insurance industry has suffered a serious blow to its reputation during the pandemic for refusing to pay out to most companies which claimed on their business interruption policies during the pandemic.
Ms Blanc said that she is not changing Aviva's position on the matter. She claimed the vast majority of customers were not covered for losses from the pandemic, adding that the firm supports High Court action by the Financial Conduct Authority watchdog to clarify whether disputed policies sold by Aviva and 15 other insurers have been triggered.