Aviva share price: what’s the outlook as new boss begins radical shake-up plan?

Earlier this month, the British insurer unveiled a radical break-up plan that see thousands of jobs cut as the ailing business tries to revive growth.

Aviva Source: Bloomberg

Aviva CEO Maurice Tulloch took the helm in March and tasked with turning the ailing insurer around, with its share price tumbling more than 20% over the last five years.

Earlier this month, the new CEO unveiled his turnaround strategy which involved a separating its UK life and general insurance businesses, as well as implementing cost-cutting measures that aim to reduce expenses by £300 million per annum by 2022.

‘Today is the first step in our plan to make Aviva simpler, more competitive and more commercial,’ Tulloch said. ‘We have strong foundations: excellent distribution, world class insurance expertise, and our balance sheet is robust.’

‘But there are also clear opportunities to improve,’ he added.

Aviva turnaround plans will see thousands of jobs lost

To achieve its cost-cutting target, Aviva plans to cut 1,800 jobs across the group over the next three years, out of a total 30,000 employees - representing a 6% reduction in staff.

‘Reducing Aviva’s costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly,’ Tulloch said. ‘We will do all we can to minimise redundancies and support our people through this.’

Despite the commitment to reduce expenses, Aviva pledged to keep its progressive dividend policy, while reducing debt on its balance sheet by at least £1.5 billion.

Simplifying Aviva is the key to reviving growth

A major component of the turnaround plan involves simplifying the overall structure at Aviva, with complexity being a major issue holding back the insurers performance, according to Tulloch.

Moving forward, the company will focus on reducing complexity, cost and duplication to improve customer satisfaction and deliver value for Aviva’s shareholders.

Year-to-date trading has remained broadly consistent with 2018, though the insurer has seen its performance in savings and asset management weaken due to lower investment markets being partly offset by growth in Europe and Asia.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Spread bet and trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.