Aviva has set out its strategy to launch an investments, savings and retirement division as it seeks to simplify its overall business.
The insurer and pension provider reviewed its group strategy and businesses, deciding to separate its activities into five divisions, which also include UK life, general insurance, Europe life, and Asia life.
The move comes amid a drive to boost the company’s competitiveness while reducing costs, with 1,800 jobs expected to be lost over the next three years.
The investment, savings and retirement division is designed to respond to “the biggest financial challenge globally”, Aviva said, while providing “an exciting opportunity” for the firm. It noted, in particular, supporting savers to put away sufficient money to afford retirement.
“We are announcing today that Aviva’s new investment, savings and retirement business will take on that challenge,” it said. “We will build on our expertise from across the group to provide the first holistic savings and retirement solutions business in the UK.”
The UK life arm will include a focus on insuring defined benefit scheme liabilities, with a wider goal to “general significant levels of cashflow to fund a sustainable group dividend”.
The group is aiming to make a net saving on costs of £300m by 2022, while also reducing its debt by £1.5bn in the next three years. It is also seeking a 12% Solvency II return on equity, and £7.5bn group operating capital generation by 2022.
The firm anticipates its 2019 operating profit to be in line with management expectations, including £300m to £400m of net management actions, which reflects favourable development of longevity reserves.
Chief executive Maurice Tulloch said the business had “ambition” and was aiming for a “progressive dividend for the long-term”.
“Our strategic review has been rigorous and thorough,” he said. “I am committed to running Aviva better. We will be more commercially focused, manage costs rigorously, and be more disciplined in how we invest.
“We will excel at the basics, giving customers a simpler, faster and more convenient service. Getting these fundamentals right will result in a simpler, stronger, better Aviva, while also improving returns for shareholders.”