Aviva Plc CEO Mark Wilson pledged to continue cost cuts and to focus on a smaller number of markets in an effort to boost earnings of U.K.’s second-biggest insurer by market value.
Wilson plans to double the holding company’s annual excess cash flow to 800 million pounds ($1.4 billion) by the end of 2016 and to cut the operating expense ratio to below 50 percent from 54 percent in 2013, the company said in a statement. It also reiterated plans to cut its gross external leverage ratio to below 40 percent of tangible capital over the medium term.
Wilson has changed at least half of his senior managers since joining Aviva 18 months ago as he seeks to rebuild capital depleted by the financial crisis and shrink a 4.1 billion-pound internal loan. The shares have gained 37 percent since the New Zealand national joined last year, giving the company a market value of 15.1 billion pounds.
“We have made some progress at Aviva, and it is time to move to the next phase of the turnaround,” said Wilson in the statement. “With a clear strategy and targets in place, the size of the opportunity for Aviva is compelling.”
The insurer has also reduced the number of markets it operates in to 17 from 28 in 2011 and said it plans to remain focused on a smaller number where it has “scale or a distinct competitive advantage.”