City analysts stirred by Aviva changes – but not shaken

Igal Mayer’s departure may have sent shockwaves through the general insurance sector, but Aviva’s share price barely flickered.

Panmure Gordon analyst Barrie Cornes said the movement at the top was a market-neutral event after the share price fell -0.6% to 448.7p.

He said: “It is not something that would move the share price. Igal moving to head the US is largely a neutral movement. In terms of Mark Hodges taking over, it is a logical progression for him.”

He said the initial public offering of Aviva’s Dutch subsidiary, Delta Lloyd, and its third-quarter results were of more interest.

Aviva aims to raise £1bn by selling a minority stake in Delta Lloyd. It could then use the money to fund acquisitions, possibly companies that could easily be bolted on.

In a statement, Aviva said it planned to raise the money to “pursue balance sheet restructuring opportunities or to explore other opportunities for growth”.

It is expected to sell between 30% and 49% of Delta Lloyd, which is valued at €4.3bn and operates in Holland and Belgium, offering life insurance, general insurance, fund management and banking services.

The public offering is expected to be completed by the end of next month. Aviva owns all the shares in the insurer, but only 92% of the voting rights because of an arrangement with a charitable trust.

On the general side, Cornes said Aviva must continue to prove it can underwrite business accurately. “The market will be looking to make sure it hits its targets on combined operating ratio,” he said. “We think it will make those targets. If not, the stock market would take it badly, but we think it is on course to achieve its combined operating ratio.”

S&P analyst Tony Silverman questioned whether the departure of Tom Godlasky, the 53-year-old head of North American operations, had triggered the reshuffle. “You have to question whether that is what really led to a reshuffle that might not have been planned.”