So, given: a composite insurance company, and is engaged in risk and life insurance. There are very few of them in Britain now. This is the one where I worked – “Black Sea”, Ingosstrakhovskaya daughter – that was. Legal & General is also a composite. “RSA” was, but it can now be divided.

Aviva. The history dates back to 1696, at first it was a mutual – “Hand in Hand Insurance society”. Grew up under the brand name “Commercial Union”. Then there were several mergers at the end of the 20th century. Including with the Norwich Union mutual insurance company. We decided to please everyone and named the united company “CGNU”.

CGNU > Aviva

I love the English for their brevity and wit in definitions. For the first time in 50 years of study I saw the expression: “the alphabet soup”, so you can call any of our abbreviations, such as AMNGR or VKHUTEMAS. Investors in the insurer did not look at the “soup” – and in 2002, “CGNU” was renamed.

Aviva. “Life, growth, love of life”. This is how it should have been perceived.

The company is prominent. Actually, in the “Insurance part of the City” until 1988, when the oil refinery, that is, “New Lloyds” was built – there was only one skyscraper. Black, so bold looking. “CU” was written on it – “Commercial Union”. You should have seen him after the explosion in the City in 1993... We were allowed into the city in a couple of days – and it was difficult to look at the sagging rags, broken windows of the glorious CU tower without pain.

Well, we’re talking about something else. The life name “Aviva” did not help. The sad story of the share price: as much as 13 pounds in 1998, at the time of the merger of CU with General Accident. 2000, accession of the Norwich Union Mutual – 7 pounds. 4 years ago, March 2017 – 5.36. April 2020 – 2.33. At the time of writing the article in “The Times”, which we took as a basis for ours, February 22 – 3.26. February 25, 2021 – 3.72.

Wow. On the one hand, the decline over 4 years: 5.36 / 2.33 – 2.3 times. BUT! Over the year – an increase of 60%! This is a lot. What is the reason?

Cherche la femme! Look for more than just a woman – Chief Executive. Yes, one that does not pursue every minute benefits. Will launch a program to reduce operations, focusing on the most important markets. And, as you can see, it will already achieve results in eight months of work.

Amanda Blank, 53 years old. Lead AXA Group, a French insurance and investment group of companies, in the UK and Ireland. She was in the highest echelons of management in Zurich. She joined Aviva in January 2020 as a non-executive director, but after 7 months, after the departure of Maurice Talloch, she became the head. In 9 years the company has lost three managers, since none of them was able to convince shareholders of the correctness of the chosen strategy.

“The company needs inspiration”, says Blank. “Her recent history is a series of mistakes and wrong steps. There were many M&A (mergers and acquisitions), but many of them did not add value to the company. There were changes in strategic directions, lack of focus, change of leaders – and all these moments are not good for any organization”.

Objective Blank: to give a “voice” to the insurer. You can translate – “create the face of the insurer.” Engage in cross-selling. And the main thing is to get away from global ambitions. Simplify operations.

It is difficult for shareholders to understand how a giant that sells a full range of policies, from cars and homes to life insurance and retirement schemes, can function. The purpose of the Blank is to remove this confusion, literally: to “demystify” the organization for investors.

Cut dividends

Important! Blank is not afraid to cut dividend payments. She defines this policy as “rebasing”: the company began to change its face, its structure. Investors must be patient! For 2019, no dividends were paid at all: covid.

At the same time, she is confident that the share price – the “heart-rate monitor” – is an indicator of the company’s pulse.

Funds: Focus on major markets. For Aviva: UK, Ireland, Canada.

This means selling your companies. The sales of companies in Singapore, Indonesia, Italy, Hong Kong, Vietnam and Turkey have already brought in 5 billion pounds. Aviva leaves Poland.

Only now the sale of operations in France proved to be STRONGLY difficult. Details are below. The most interesting.

By the way, it is curious: Aviva’s debts amounted to 9.3 billion pounds. With $ 5 billion in sales, Aviva reduced debt by only $ 1.5 billion.

After sales, the company’s profit will be reduced by a third (!). But it will become more efficient in terms of costs and capital investment. And profit for 2020 will amount to 2.8 billion pounds. Therefore, the article in “The times” ends with a tip: Buy Aviva shares. Why?

“The company is showing significant progress under the new management and the prospects are excellent”.

In parallel, news: the oldest British insurer RSA, Royal Sun Alliance, was sold for 7.2 billion pounds to a consortium of Canadian and Danish companies in November 2020. RSA was also a “composite” selling life and risk insurance policies. New investors are going to split the company.

Covid and removal

Covid: “I look at these skyscrapers [from the 22nd floor of the Aviva City tower, opposite the Lloyds Bank] and I see floors of empty offices. And I think it’s not great. There is a time and place to work from home. And for office work”. But Blank does not intend to instantly return all employees to the office.

Although working remotely is not easy, managing a huge company “remotely” is even more so. Blank sometimes has to do video presentations for 800 employees at a time. What she calls “video walls” is a good definition. I myself began to record lectures for YouTube and conduct Zoom conferences, and I know how not to just stir colleagues and friends through the web of the screen. “If you’re an introvert, it’s not easy for you”, says Blank.

Covid: £ 100m in losses (165 pre-reinsurance), all paid, no insurers filed claims as clients of other companies did six months ago.

Insurers are not frequently liked

“We are not an organization that does not care about our policyholders, but alas, policyholders always believe that insurers do not pay for losses”. This is happening not only in the East of Europe...

High heel shoes

A little about the Lady. We are so lacking in simple biographies. In “The Times” “they are”.

Born on August 8, 1967. Married. Graduated from high school in Wales. She studied history at the University of Liverpool (not at all a specialized education!), Then she received an MBA in Leeds. First job in a video rental salon. Lives in Hampshire (luxurious, but far from London). She does not read books, does not have time – only newspapers. She listens to music from the 80s. The last vacation is in 2018, in Australia. Dream: to spend Christmas in New York.

Working day: works from home on Fridays, sometimes on Mondays. He spends his working week away from home (and daughters) in London. The company pays her £ 2,500 a month for an apartment – but Blank wants to buy his own. (That is, with a salary of 1 million pounds plus bonuses, a second home in the City is still only a dream.)

Gets up at 5 am, exercises, in the office – at 7:15 am and until 7 pm. Rides a bike for recharging. Rugby fan, President of the Welsh Rugby Union.

Blank started her career with CU, so she feels “homecoming” – like she returned home. She was under 30 when she became the first female branch manager in the entire CU structure. It turns out that at the end of the 90s there were almost no women in the management of insurers – interesting! We, in Eastern Europe, were. That’s all there is to know about “Western feminism.” They are fighting there for the fact that “here in the East” we already have the norm.

In the mid-90s, Blank was provided with a car from a company, Renault Lagoon. She now drives a white Porsche 911 and Tesla. She likes to wear sneakers, but wears high heels to work, calls himself @Amandas_Shoes on Twitter.

(In parentheses, “heels” are just heels. Therefore, my English-raised daughters say in Russian: “I will wear heels.” Laughter! And a reflection of the fact that “heels” are rarely worn now... Alas!).

Blank has two daughters, 18 and 14 years old, comes out, born at 35 and 39 years old. Alas, the norm now, these “late” births.

“I think I did the wrong thing by taking only three weeks off after the birth of my second daughter”. She had just started working at Towergate, a large brokerage company, and put work first. “These are probably my Welsh roots: you know that you are committed to something” (“you feel you’ve committed to something”).

Investment time machine

A curious story. For Blank – the possibility of undermining all her actions by one young man, Max-Hervé Georges, 31 years old, French.

His dad bought a seat in the investment time machine. “The man who’s investments can’t lose” is what they call him.

Then, in the late 1990s, France was a “backward” country in terms of information technology. Therefore, insurers sold policies...

Cours connu.

One of only such policies that Monsieur Georges has is estimated at 1 billion euros. Rather, its redemption value is as follows.

Aviva will receive 3.2 billion pounds from the sale of the French subsidiary of the Aema Groupe. But part, not disclosed part of this income, Aviva should put aside. If the obligations under policies like Monsieur Georges turn out to be higher than planned, Aviva will have to pay extra.

How did it happen? Back in the 1980s, French insurers, including Abeille Vie, began to offer “known price arbitrage” (à cours connu) contracts. It provided protection against market fluctuations in stock prices. It worked like this: an investor could buy securities at the rate…. 8 days earlier than the day of purchase.

Do you follow the price of, say, Aviva? It was 2.30 last Wednesday. Today is Tuesday, stocks are 3.50. You buy 1 million shares (they won’t sell that much, really) – today! Pay £ 2.3 m. And they already cost 3.5 million today. On one operation – 1.2 million profit. Guaranteed, and you don’t have to do anything.

Already at the beginning of the 21st century, French insurers figured out how wrong they were. AXA, AGF and others rushed to buy these policies from their policyholders. Aviva acquired Abeille Vie in 2002. And what is the nuance of cours connu – obviously, did not understand. However, I have reduced the list of possible investments. And she began to refuse to follow the instructions to buy securities.

Let’s go lawsuits. The Georges family bought cours connu policies for their three children. Already in 2002 she filed a lawsuit against Aviva. Young Max-Hervé, as soon as he turned 18, joined the process.

For 2021, French courts have issued at least 50 judgments against Aviva France. Monsieur Georges went to the Court of Cassation, which recognized such life insurance policies as legally legal and binding (binding under French Law). However, now Georges (I am pleased to print this name) has to win the courts in order to prove the existence of his claims and assess their size.

Aviva is said to have been sued by at least 30 policyholders. In general, there may be several thousand of these existing contracts. In its reports, Aviva does not give details on this position – for which it is severely criticized.

Numbers

The numbers in the photo are from “The Times”. It’s funny how even reputable Western publications get confused in numbers. The step from a million to a billion is irresistible for many. Well, judge for yourself: Aviva, 2019–20.

The cost of a new business, “Value of new business” – I do not quite understand, to admit what it is. New clients in a year? Then why value, not premium collection?

Figures: 828 and 714 million pounds. That is, in 2020 there are fewer new businesses.

Risk insurance premium collection – 7 and 7.1 billion pounds. That is, half of, say, the Russian insurance market is one company, and only the risky part of it.

Capital surplus – net funds. 12 – 11.8 billion pounds. Wow.

And finally, for what I chided “The Times” – Assets under management. 501 million – 522 million WELL CANNOT be like that. Of course, we are talking about billions. Because, as an insurer with a positive balance of 12 billion – assets under management of 0.5 billion cannot be. But half a TRILLION – maybe. ■

Aviva

Key figures

Nine months to the end of September

Chart: The Times and The Sunday Times • Source: Refinitiv