British insurer Aviva will change the structure of its UK business and cut costs across the firm, with the loss of 1,800 jobs, it said on June 6.
Aviva said it would make cost cuts of 300 million pounds ($380.22 million) over three years, in a statement ahead of its first investor day under new Chief Executive Maurice Tulloch.
According to the statement, Aviva intends to reduce its expenses by cost savings in contractor and consultant spend, reduction in project expenditure and other efficiencies. This will involve approximately 1,800 role reductions across the group over the next three years, out of a total workforce of around 30,000.
The insurer has engaged with employee representative bodies for consultation on specific proposals, and stated that it will look to ensure that redundancies are kept to a minimum wherever possible, for example through natural turnover.
Additionally, the company plans to manage its life and general insurance businesses in the UK separately, with the digital direct business integrated into UK general insurance. This intends to enable stronger accountability and greater management focus on the UK’s life and general insurance businesses.
The cost base in 2018 was four billion pounds, an Aviva spokeswoman said.
Following the departure of Andy Briggs, head of the life and general insurer's UK business and a contender for the top job, Aviva said it would review its UK life and general insurance businesses.
Its UK digital business, housed in a former garage in the City's tech district, will be incorporated into the general insurance business, Aviva said.
Angela Darlington has been appointed interim Chief Executive Officer of UK life and Colm Holmes CEO of general insurance across the group, including Britain.
"Today is the first step in our plan to make Aviva simpler, more competitive and more commercial," Tulloch said in the statement. "Reducing Aviva's costs is essential."
Aviva employs 30,000 people and its international markets include Canada, France, Ireland and Asia.
Aviva said trading to date had been in line with 2018 and reiterated its commitment to a progressive dividend policy.