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Aviva on lookout for acquisitions

Aviva has made it clear it is preparing for acquisition opportunities while Legal & General and Standard Life have effectively ruled themselves out of any consolidation activity.

During an interim results conference call this morning, Aviva group chief executive Andrew Moss said: “I do think you have to look carefully at inorganic opportunities which may be available in the coming year.

“We have seen a number of opportunities come across our desk in the course of the past nine months. We have not wanted to take advantage of those given the particular characteristics of those opportunities.

“But I am absolutely determined that Aviva should be in a position where it will have the financial flexibility to take advantage of any opportunities that may come.

“We want to be in a position where we have choice and we can take action because there is real value to be reaped for our shareholders.”

Aviva has boosted its capital surplus to £3.2bn compared with £2bn at year-end. Slashing its interim dividend by 31 per cent to just 9p a share saved the firm £100m.

But Standard Life chief executive Sir Sandy Crombie said, during the firm’s interim results conference call yesterday: “We have spent years developing a different business model from the rest of the sector.

“We have a lot of opportunities to grow organically and that is where our main focus has lain and continues to lie for the future. We are looking forwards rather than consolidating backwards.”

Earlier this week, L&G chief executive Tim Breedon also suggested the provider would not get involved in the consolidation drive expected in the life sector.

He says: “There are economies of scale to be achieved but you do not get that by putting A and B together, you have to grow A organically.

“Ramming two small businesses together gets you two small businesses. We are cautious of the benefits of consolidation in most of the areas in which we operate.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. I’ve heard it all now…..
    What on earth are AVIVA talkign about? They are still failing miserably with the integration of CGU/GA/CU etc years ago. They cannot provide a normal service with what they have got, how bad will they get if they had more acquisitions?
    Jeez – get your current house in order before going after others, your service is still the worst in the industry.

  2. Return the money from whence it came
    This public announcement defies logic, of the simple mind that is. Policyholders are losing money hand over fist yet these life offices say they have money to burn on acquisitions! Come on FSA, do something positive for the poor old policyholder…

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