9th Jul 2014 06:53
LONDON (Alliance News) - Insurer Aviva PLC Wednesday said out new cashflow targets for the next couple of years, continuing a turnaround aimed at driving up its profitability and simplifying its balance sheet.
In a statement ahead of a capital markets day, the company said it now wants to double the annual excess cashflow booked by the holding company to GBP800 million by the end of 2016, from GBP400 million in 2013, and reduce the operating expense ratio to below 50% by the same time, from 54% in 2013.
Aviva also reiterated its deleveraging targets, saying it still wants to reduce the intercompany loan balance to GBP2.2 billion by the end of 2015 and reduce its gross external leverage ration to below 40% of tangible capital over the medium term.
"We have made some progress at Aviva and it is time to move to the next phase of the turnaround. 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," Chief Executive Mark Wilson will tell analysts at the capital markets day.
The insurer has recently been trying to simplify its balance sheet with a series of recent sales of businesses that don't fit with its aims. Since March, Aviva has announced disposals of its Turkish general insurance business, US asset management boutique River Road, and a South Korean joint venture, as well as a restructuring of its Italian business.
The company had been heavily criticised by investors by having an over-complicated balance sheet, including big inter-company loans, and for having a high cost base relative to some peers.
Wilson has intensified Aviva's turnaround programme, including presiding over a cost-cutting plan.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Aviva