An activist investor would have been very useful at Aviva for most of the insurer’s 20-odd years of existence, frustrated shareholders will feel. Outside the banking sector, it’s hard to think of a major UK financial services company that has disappointed its investors so often, or showered such large rewards for failure on its chief executives. The share price is less than half what it was at the time of formation via a three-way merger at the turn of century.
The activist that Aviva has finally attracted is Cevian Capital, which has turned up with an GBP800m, or 5%, stake just at the moment when Amanda Blanc, chief executive since last July, seems to be the first boss with a decent plan.
She has sounded like an activist herself at times, bemoaning Aviva’a lack of focus. She’s also done something about it: retreats from France, Poland, Singapore and elsewhere will raise GBP7.5bn when completed and will leave Aviva operating only in the UK, Ireland and Canada markets, where it retains clout.
What’s Cevian’s beef? It’s not the strategy, the disposals or Blanc. All got a thumbs up. Rather, this dispute is about capital, cost-cutting and dividends. On those scores, Cevian wants more. Through the Swedish-based firm tends to operate at the polite end of the activist spectrum, there is plenty of potential for aggro here.