Aviva continues business simplification drive

Aviva will ditch its UK trading name Norwich Union this summer

Insurance group Aviva's business simplification plan, which includes outsourcing and IT systems consolidation, continues “at pace”, the company said today in its latest financial results.

The initiatives, intended to reduce costs and increase efficiency, include the ongoing outsourcing of administration of approximately three million life and pensions policies to reinsurer Swiss Re.

Some 1.7 million policies have been moved already, in the project phase that concluded in March. Further migrations are planned for later this year.

Additionally, Aviva has completed the migration of its Lifetime back-office administration set-up to insurer Scottish Friendly, which is also working on the migration of Aviva’s wrap platform onto its existing systems.

Another outsourcing move involved the migration of the first tranche of Aviva’s collective investment to supplier International Financial Data Services.

And the insurer also signed a £700m datacentre services deal with EDS that should help to focus more on business-critical areas and reduce IT spending.

Business benefits stemming from the projects to date include the decommissioning of 225 systems – systems proliferation due to mergers is another problem the insurer needed to tackle – which resulted in headcount reductions of 1,100 permanent and 590 contractor roles.

“Applications development, management, architecture and strategy are areas where we make a real difference, whereas we see infrastructure increasingly becoming a commodity as we move towards a lot more virtualisation and service-based environments, and especially during the current economic conditions,” Malcolm Simpkins, UK IT services director at Aviva told Computing when the EDS deal went through in March.

Aviva’s life and pension sales dropped by 12 per cent to £2.5bn. Worldwide sales in the first quarter of 2009 totalled £10.3bn, with life and pension sales up 11 per cent to £9.57bn.

"Sales are resilient and we've take action to improve margins in key markets . A disciplined approach to writing business and a focus on capital management will continue to serve us well," the company said in a statement.

Aviva is best known in the UK for its Norwich Union operation, but is dropping the brand name later this year.