Insurance giant Aviva hints at a retreat from the world stage in another blow to ‘Global Britain’

Has the retreat been sounded at another of Britain’s small band of ‘global’ companies? After well over a decade of trying to be an international heavyweight, Amanda Blanc, the new CEO of Aviva, says she wants to “focus on our strongest businesses in the UK, Ireland and Canada and aim to be the UK’s leading insurer”.

Aviva is a sprawling business that offers everything from pensions to pet insurance and has its flag planted in numerous countries.

There had been some speculation of a possible break-up of its life (which includes pensions, other long-term savings and insurance) and general insurance (home, motor, pets etc) operations, but that doesn’t appear on Blanc’s menu.

Instead of streamlining the product mix, she is, with that statement, signalling an intent to streamline the markets in which Aviva operates.

The operations in Asia and Europe won’t be getting much love or even attention in future. They will, instead, be “managed for long-term shareholder value”. That’s usually corporate code for sold, run down or otherwise exited from when the time is right.

The City certainly took that to be the message from the CEO’s words. The bombed-out shares were suddenly hotter than scotch bonnet chilli sauce as investors decided they wanted to take Blanc to the bank.

Some of that was because of the results. The company reported £1.2bn of operating profits for the first six months, which was down on last year, in part due to Covid-19-related claims, but could have been worse. There was also a small dividend.

But what really excited the City was the prospect of a multibillion-pound sell-off.

Blanc’s three favoured markets account for about 60 per cent of the insurer’s earnings. Notably absent from the trio she highlighted were the sizeable businesses in France, Italy and Poland, so she’d best put her mobile on silent if she’s given her number out to any investment bankers. It will be ringing off the hook.

Dealmaking hasn’t been the priority for executives during the pandemic and so they’ve been starved for business. Blanc’s favoured strategy holds out the prospect of fresh fees.

Analysts at Citi put a figure of nearly £7bn on the potential proceeds, with the clear hope that special dividends will flow from them.

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Aviva is hardly the first business to call time on its global ambitions. A similar path has been taken by Tesco in recent years. Ditto some of the banks (for obvious reasons).

Instead of invest and grow, it’s sell off, shrink, divvy up the proceeds, and focus on the rump to the cheers of shareholders.

Corporate Britain, and those who invest in it, clearly don’t think much of the “Global Britain” Brexity politicians are always banging on about. The ambitions of both groups are quite small.

Don’t blame Blanc. She’s moving with remarkable speed and at least she seems to have some idea of where she’s going by contrast to some of her predecessors.

The door to the CEO’s office she now occupies has been revolving of late. Her predecessors might have had globetrotting ambitions but they’ve largely failed to live up to them with world-class performance. It’s too often looked like this business has been jogging along on a road to nowhere.

Perhaps Aviva will be better off staying home.

Those executives were rarely underpaid, mind, and that too isn’t a problem unique to Aviva. That’s one reason “Global Britain” so often fails with global companies. When their bosses slip up, they’re rewarded for it.