Analysts lament exit of ‘respected’ Igal Mayer and speculate at Trevor Matthews move
UK general insurance chief executive David McMillan’s promotion to Aviva’s general executive committee (GEC) is being hailed as a “terrific achievement”, marking him out as a potential candidate to succeed group chief executive Andrew Moss.
The reshuffle included the exit of European head Igal Mayer, North American chief executive Richard Hoskins, and Aviva Investors head Alain Dromer as the insurer moved to save money by simplifying its management structure.
McMillan will also now report directly to group chief executive Andrew Moss, as UK chief executive Trevor Matthews is moving to head of developed markets.
By joining the GEC, which is the key decision-making team, McMillan will have a powerful influence.
Shore Capital analyst Eamonn Flanagan said McMillan and UK life chief executive David Barral, who was also promoted to the GEC, are now potential “younger generation” candidates to succeed Moss, although an outside appointment is more likely.
Flanagan said: “Maybe Aviva is going to skip a generation and bring forward the 40-year-olds rather than the 50-year-olds to run the whole group. However, you do feel that Aviva is one of those companies that will bring an outside big heavy-hitting guy to run the business. But it’s a terrific achievement.”
Mayer exit concerns
Meanwhile, many aspects of the shake-up have been criticised by analysts and shareholders. Mayer was rated highly in the City, and his departure triggered concern.
It is unclear whether Mayer was forced out by Aviva or left of his own accord. One source said Mayer may have been unhappy because he was never going to succeed Moss as group chief executive.
Panmure Gordon analyst Barrie Cornes said: “The departure of executive director Igal Mayer came as a significant surprise to us, and relatively hot on the heels of the departure of former UK chief executive Mark Hodges.”
Mayer had a bruising encounter with brokers in 2009, when his attempts to slash commissions contributed to a £1bn fall in premium income. He left the position and later rehabilitated his reputation as European head. Deutsche Bank analyst Oliver Steel said: “We regret the departure of Igal Mayer, arguably the most respected of the group’s operational managers.”
Flanagan said the restructure felt “cobbled together” in a rush.
On the appointment to developed markets of Trevor Matthews, who also chairs the UK and Ireland board, Flanagan asked: “Has he been shifted upstairs, downstairs, sideways?”
Institutional shareholders have dismissed the overhaul as “window dressing”, with one cautioning it was unlikely to stop Aviva’s “continued underperformance”.
Another said it was “slightly odd” that the restructuring plan was unveiled two months prior to John McFarlane taking over as chairman.
Moss believes the restructure would save Aviva millions. He said: “The changes will deliver further operational benefits, accelerate delivery of our strategy and provide opportunities for profitable growth.”