Advertisement
UK markets closed
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • FTSE 250

    19,884.73
    +74.07 (+0.37%)
     
  • AIM

    743.26
    +1.15 (+0.15%)
     
  • GBP/EUR

    1.1706
    +0.0013 (+0.11%)
     
  • GBP/USD

    1.2645
    +0.0023 (+0.18%)
     
  • Bitcoin GBP

    55,723.29
    -335.30 (-0.60%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.40
    +47.29 (+0.12%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • CAC 40

    8,205.81
    +1.00 (+0.01%)
     

Straight-talking Amanda Blanc looks to put wind in Aviva's sails

Boat
Boat

Aviva’s new boss, Amanda Blanc, says she hasn’t a day to waste in her mission to breathe fresh life into the FTSE 100 insurer.

“Aviva once set the tone for the industry,” she says. “It was innovative, it was distinct, it had energy and ambition. We need to be the leader in our industry again.”

If departing boss Maurice Tulloch underwhelmed investors with a steady-as-she-goes approach of tweaks and cost-cutting, his 52-year-old successor is leaving no doubt that the company has fallen from its perch and improvement is needed quickly.

Acquaintances describe Blanc - whose appointment brings the total number of female FTSE 100 chiefs to seven - as a hard worker.

ADVERTISEMENT

She has said she prefers 5am starts to working late into the evening and credits her husband, who gave up his career so she could plough ahead with hers, as the biggest influence on her success.

Amanda Blanc
Amanda Blanc

Her “magnificent people skills” mean colleagues will know exactly where they stand with the new boss, says Ashwin Mistry, executive chairman of insurance broker Brokerbility, who first met Blanc when they worked at separate insurers in Leicester 30 years ago.

From that job in Commercial Union, the University of Liverpool history graduate rose through the ranks to become deputy chief at broker Towergate Insurance before leading Axa’s UK and Ireland business and then Zurich’s European operations. She joined the Aviva board as a non-executive in January, just months before George Culmer became chairman.

Her straight talking style will be put to the test at Aviva, which has struggled to explain its core mission to investors. One senior insider admitted in recent months that he envied Lloyds Banking Group’s ability to encapsulate its strategy in just three words: “Helping Britain prosper.”

Blanc, who spent her entire career in insurance, save for one unhappy year as a management consultant in the 1990s, takes over a sprawling operation with both general and life insurance divisions and a presence across the UK, Europe, Canada and Asia. “It is quite a cumbersome organisation with life and GI [general insurance],” says Mistry.

Some analysts and investors believe a narrower focus could unlock value for shareholders. The market’s lacklustre response to Tulloch’s conservative plan means Blanc is under pressure to launch a radical overhaul.

The firm could be separated into life and non-life divisions, or UK and international, for example. Significant divestments could offer a solution without a formal breakup. Blanc says she will consider all options, including investing where she sees opportunities for growth.

A split may not be the panacea that some investors wish. Tulloch spent eight months preparing his strategy after his appointment in March last year, only to opt against any major sales, feeling the offers received for the Singaporean business did not reflect its profitability.

“As we have seen with Prudential plc’s split with M&G, business splits may sound exciting in theory but in practice they are very hard and complicated, and if they were going to create significant value, would likely have been done years ago,” says Alan Devlin, an analyst at Shore Capital.

The benefit of Aviva’s current diversified model could offset any advantages that may be produced by a split, he says.

The hefty dividend - currently on hold due to pandemic-induced uncertainty - will also be under the spotlight.

Tulloch opted not to follow his three predecessors, who all cut the payout upon arrival. The yield is about 12pc based on its 2021 financial forecasts - far higher than Legal & General’s 8pc or Phoenix Group’s 7.4pc - implying that investors may be able to tolerate a reduction.

Blanc, who once stacked VHS tapes at her local video store, will need to build bridges with customers and also contend with an economic slowdown and the challenge presented by Covid-19.

Aviva is under pressure over its refusal to pay out on business interruption claims by some of its customers and is one of 16 insurers whose policies will be examined in a case being brought to the High Court by the City regulator next month. It is also being threatened with legal action by struggling pubs, hotels and restaurants for its refusal to compensate them.

Blanc, who is jetissioning all her other jobs except a voluntary position as chair of the Welsh Professional Rugby Board, intends to meet her daunting in-tray head on.

“In life you get one opportunity to make a first impression and Amanda lives up to that. I think within 10 minutes of talking to her… you knew she was destined for something,” says Mistry.

Aviva’s share price was up 3.5pc on Monday afternoon, suggesting investors are enthused by Blanc’s fighting talk. They will demand that she backs it up with action in the coming weeks.