Insurance company Aviva has announced that its One Aviva cost saving programme is to be extended with a new target of £500 million up from £350 million. One Aviva includes a rationalisation of IT at the British financial services provider. Announcing the increased savings target as it released its interim results for the first six months of the year, Aviva also said its operating profits were up.
In a wide ranging announcement to the London Stock Exchange Andrew Moss, Aviva group chief executive said One Aviva has been a successful programme, and that its scope and savings are ripe for extension.
Norwich Union, the UK brand of Aviva, has decommissioned legacy computer systems as part of One Aviva and Moss said IT will continue to play a central part of One Aviva. Aviva said the scope of One Aviva will increase by £150m with a cost saving target of £500m. “We have made significant progress against the clear targets we have set ourselves,” the Aviva statement said.
“We are investing in our brand and will launch a single global intranet later this year to bring our people even closer together as part of a new global IT strategy,” Moss said. Adding some detail to what IT changes to expect he said, “We see opportunities for shared services in each of our regions and we estimate our new global purchasing process could bring savings of more than £50 million.”
Aviva reported EEV operating profit up by 12 per cent to £1,719 million and IFRS operating profit was also up by seven per cent to £1,233 million. This was as a result of an increase in life and pension sales, up by 11 per cent to £17,283m. “In the face of economic headwinds Aviva has made real progress in the last six months,” Moss said. “We are accelerating our transformational change programme to deliver a unified and more profitable company in line with our One Aviva, twice the value vision. Short term economic uncertainties persist, but we remain positive about our prospects.” Life and pension sales in the UK were up by one per cent to £5,863m and EEV operating profit was up by 14 per cent to £471m. “We anticipate that the UK market will remain subdued in the second half of the year, but we will continue to maintain a market leading position and our profit outlook is on track for continued growth,” Aviva said.
Aviva reported that sales in North America and Asia Pacific countries have offset the slowdown in Europe. The Norwich Union brand will disappear next year as the Aviva brand is set to become the global moniker for the British insurance giant. “Uniting our business under a global brand is one of the most tangible examples of our One Aviva vision,” the company said.
Aviva has decommissioned 100 legacy systems earlier this year as part of the One Aviva programme. The insurance giant has also struck an outsourcing deal with Swiss Re to administer life and pension policies.