Aviva plans £400m savings

Aviva has unveiled plans to make £400m of cost and efficiency savings by the end of 2012.

The cost-cutting exercise was announced this morning in its interim results for the nine months to September 30 2010.

It is expected that half of the cost savings will be made in the UK, but will not result in UK job losses. However jobs will be cut in Canada and the US.

Aviva is also not expected to sell off parts of its UK business. However group chief executive Andrew Moss has not ruled out the possibility of a total sale. He was reported this morning saying: "Of course there is a price at which we on the board of Aviva would entertain an offer for any of our businesses but it would have to provide the right value for Aviva's shareholders."

In a statement, the insurer said "Aviva has continued to grow profitable sales at the same time as maintaining strict cost disciplines.

"Today we have confirmed that, as our transformation programme continues to deliver benefits, the group will deliver £200m of cost savings and a further £200m of efficiency savings by the end of 2012. We will continue to focus on both cost and capital efficiency, balanced with increasing the volume of profitable sales.

"Consultation on the planned closure of Aviva’s final salary staff pension scheme completed at the end of September.

"Moving staff to a defined contribution scheme from 1 April 2011 will reduce the pension scheme deficit, benefitting Aviva’s net asset value by around £275m, and will reduce future funding costs by £50m a year."