Aviva announces strategic overhaul

The businesses earmarked for disposal include its South Korean arm and its British large-scale bulk purchase annuity unit, and contribute £300m to after-tax profit.

The insurer, whose weak stock market performance led to the removal of chief executive Andrew Moss in May, said it had identified a further 27 businesses which “require significant improvement”, including its Irish general insurance arm.

The disposal plan is the culmination of a two-month scrutiny of Aviva’s 58 businesses launched by executive chairman John McFarlane, who took day-to-day control of the group after Moss quit on May 8.

“Things are tough and the environment is challenging. However, I am confident we will be successful,” he said in a statement.

Aviva’s shares closed at 281p on Wednesday, valuing the group at about £8.3bn.

The stock has fallen 35 per cent in the past year, against a 10 per cent decline in the Stoxx 600 European insurance share index.

Analyst Barrie Cornes at Panmure said: “As anticipated there are no big disposal announcements, but a plan to narrow focus, build financial strength and improve performance.

“Along with management changes there is a plea for shareholders to be patient. The announcements appears logical and sensible given where Aviva is today and in our view the new strategy could well prove to be the turning point for long suffering shareholders.

“Given the rock bottom valuation we believe that this represents a very attractive entry point.”

Aviva has 4,500 staff in Yorkshire, including 1,700 in Sheffield. Its life business is headquartered in York.