Aviva Plc (AV/), the U.K.’s second- biggest insurer by market value, said its heads of Europe, North America and investment management will step down as it creates two divisions for developed and higher-growth markets.
Igal Mayer, chief executive officer of Europe, Richard Hoskins, CEO of North America, and Alain Dromer, CEO of Aviva Investors, will leave, London-based Aviva said today in a statement. U.K. head Trevor Matthews will be promoted to executive director of developed markets and Asia CEO Simon Machell will lead its higher-growth markets unit.
Aviva may be reversing its strategy announced in 2009 to build a hub in Europe, described at the time as the fastest- growing retirement and savings market, according to Kevin Ryan, a London-based analyst at Investec Plc. (INVP) The insurer, which gets about a third of revenue in continental Europe, has trailed U.K. competitors in the FTSE ASX Life Insurance Index (FALIFE) amid Europe’s debt crisis.
“It’s a reversal from a lot of things they’ve said in the past,” said Peter Eliot, a London-based analyst at Berenberg Bank with a hold rating on the stock. “The overall strategy is certainly less clear.”
The stock declined 2.6 percent to 299.6 pence in London trading, valuing the insurer at 8.7 billion pounds ($14 billion). The firm has fallen 28 percent in the past year, compared with a 4 percent drop in the FTSE 350 Life Insurance Index.
Like U.K. competitors Legal & General Group Plc (LGEN) and Resolution Ltd. (RSL), Aviva has been focusing on running its U.K. life insurance operations to generate more cash by writing policies that require less capital backing and offer lower guarantees.
Grouping France, Spain, Italy, the U.S. and Canada with the U.K. may allow the company to replicate this strategy more broadly, Eliot said. “Putting all the developed markets together may focus them on cash generation,” Eliot said. Asia, Poland, Turkey and Russia will provide the company with growth, he said.
The changes will create a “simpler and more efficient organization which will deliver further operational benefits, accelerate delivery of our strategy and provide opportunities for profitable growth,” Aviva CEO Andrew Moss, 54, said in the statement.
Mayer, 50, is Aviva’s second European CEO to announce he’s departing in the past 18 months, following Andrea Moneta, who left the company in February last year. Moneta championed a “quantum leap” strategy in 2009, which planned to create a pan-European insurer with a single headquarters to serve its 18 million customers on the continent.
Mayer previously worked to turn around and lead Aviva’s U.K. general insurance unit, its North American division and most recently the company’s European operations. He had been with the company for 23 years.
“We regret the departure of Igal Mayer, arguably the most respected of the group’s operational managers,” Oliver Steel, a London-based analyst at Deutsche Bank AG with a hold rating on the stock, said.
Matthews, who joined Aviva from Friends Life last year, will take over Mayer’s responsibility for Italy and Spain as well as Canada in addition to his position as CEO of the U.K. and Ireland. Matthews replaced Mark Hodges, who left to join Towergate Insurance Ltd. last year after two decades with the company
Chief Financial Officer Pat Regan, who joined Aviva in 2010, takes on the additional job as head of Aviva Investors, replacing Dromer. The move is “not a surprise in practice given the recent reorganization of this operation,” Steel wrote in the note.
David Barral, head of U.K. life insurance, David McMillan, head of U.K. general insurance and Philippe Maso, head of the insurer’s French division, will join the group executive committee, which reports to directly to Moss, the company said.
To contact the reporter on this story: Kevin Crowley in London at email@example.com
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org;