Jim Armitage: Maurice Tulloch tries to breathe life into Aviva's ailing share price
When it comes to trampling on legacies, Maurice Tulloch is up there with the best of ’em. Just weeks since replacing the ousted Mark Wilson, the pugilistic Canadian today ripped up one of his biggest innovations.
Wilson’s mantra was that Aviva’s future lay in selling customers life and general insurance. We pay out if you die, and if you flood the loo.
Integrate both businesses under one team, he reasoned, and the cross-selling will magically begin.
It didn’t. Brits have been so conditioned to shop around or get ripped off that the idea of being all in with one player seemed a mug’s game. Aviva’s cross-selling barely budged.
So today, Tulloch ripped the two businesses apart again, figuring more focus on each will make for better products, winning customers that way. Legal & General figured this out long ago, last week selling its general insurance business to focus on its real specialism, life cover. That led to expectations Aviva would also sell one or t’other.
Today’s move could be a precursor to that, but not necessarily.
Unlike L&G, whose general business was tiddly, Aviva is huge in both life and general. There are good synergies for it in retaining its composite structure. Big savings on regulatory capital for one, brand recognition for another.
But the move, coupled with yesterday’s removal of the finance director, makes for more transparent accounts for each side. That should make them easier for potential bidders to value, getting Aviva’s sluggish share price moving. The trouble with hiring a chief executive from within at a troubled company is that they have to prove they’re not part of the problem. Tulloch has gone some way towards making that case.