Aviva unveils next phase of turnaround plan

9th Jul 2014 11:21

Aviva plans to double its cashflow over the next two years and reduce its debt as part of an overhaul of the UK insurer.The company on Wednesday unveiled the next phase of its turnaround plan at its capital markets day for investors and analysts. The plan includes doubling the annual excess cashflow to £800m by the end of 2016 and reducing the operating expense ratio below 50% by the end of 2016.The group also wants to reduce the loan balance to £2.2bn by the end of 2015 and the gross external leverage ratio to below 40% of tangible capital over the medium term.To achieve its goals, the firm is investing in its digital offering across all distribution channels and focusing on a small number of profitable markets. Aviva has reduced its footprint from 28 markets in 2011 to 17. "We have made some progress at Aviva and it is time to move to the next phase of the turnaround," said Chief Executive Mark Wilson. "With a clear strategy and targets in place, the size of the opportunity for Aviva is compelling. We acknowledge the challenges ahead, but we now have an exceptional leadership team to enable us to deliver."RD