Aviva is one of the largest insurance companies in the world, with a presence in 16 countries and over 33 million customers. However, in recent years, the company has been facing a number of challenges that have raised concerns about its future prospects.
One of the most significant challenges for Aviva has been regulatory issues. In 2019, the UK regulator, the Prudential Regulation Authority (PRA), raised concerns about the company’s capital position and issued a warning to Aviva to improve its risk management practices. This led to the resignation of Aviva’s CEO, Mark Wilson, and a reassessment of the company’s strategy.
Aviva has also been struggling with low profits, particularly in its UK business. In 2020, the company reported a 12% drop in operating profits for its UK life insurance business, which was attributed to low interest rates and increased competition. This has led to calls for Aviva to streamline its operations and focus on more profitable areas of the business.
In addition to these challenges, Aviva has also been the subject of shareholder activism. In 2020, the activist investor, Cevian Capital, took a 5% stake in Aviva and called for the company to reduce its complexity and improve its financial performance. This has led to speculation that Aviva could be broken up or sold off in parts to unlock value for shareholders.
Despite these challenges, Aviva has taken steps to address its issues and improve its future prospects. The company has appointed a new CEO, Amanda Blanc, who has a track record of turning around struggling companies. Blanc has already announced plans to simplify Aviva’s operations and focus on more profitable areas of the business, such as its Asian and European operations.
Aviva has also been investing in new technologies, such as artificial intelligence and automation, to improve its efficiency and customer experience. The company has launched a new digital platform, AvivaPlus, which offers customers a more personalized and flexible insurance service.
Overall, Aviva faces significant challenges in the coming years, but the company has taken steps to address its issues and improve its future prospects. By focusing on more profitable areas of the business, streamlining its operations, and investing in new technologies, Aviva could emerge stronger and more competitive in the global insurance market.
