Aviva ‘considering 
joining takeover race 
for Co-op insurance’

Aviva is among a number of firms considering bidding after the Co-op put the division up for sale last month to raise cash to plug a capital shortfall – which is threatening its swoop for 632 Lloyds Banking Group branches.

The Co-op has already sold its life insurance and asset management arm to Royal London for £219m to boost its balance sheet as City regulators put lenders under pressure to address a £25bn combined capital hole.

It is thought that Aviva is among a number of potential bidders, also including Ageas, the UK arm of Belgian financial services group Fortis, and private equity entrepreneur Edmund Truell.

But such a move would be controversial for Aviva, which has been shrinking not expanding in recent years.

Last week it revealed plans for another 2,000 job cuts across its UK, European and Asian workforce.

Under new boss Mark Wilson, Aviva is undergoing a major restructuring which last year saw £275m of annual cost savings and a £1.1bn deal to exit US life and pensions.

It reported a loss after tax of £3bn in annual results last month and a 44 per cent cut in its full-year dividend to 9p a share.

Aviva, which employs around 4,300 people in Yorkshire at sites in York, Leeds and Sheffield, declined to comment on the speculation surrounding a potential bid for the Co-op’s insurance arm.

The Co-op’s general insurance business provides cover for cars, homes and pets. It is under
scrutiny amid fears that its takeover of Lloyds branches is on the rocks and after its banking division racked up annual losses of £662m.