Insurer Aviva to cut 16 underperforming businesses

Aviva, the giant UK insurance group, has announced plans to jettison 16 "non-core" underperforming businesses in an attempt to boost revenues and its share price performance.

In a statement to shareholders, external, new chairman John McFarlane promised "a leaner and more agile" business.

Aviva's South Korean arm will be sold off, while its UK bulk-buying annuity unit will not take on any new business.

Mr McFarlane also set a target of cutting costs by £400m by 2014.

Aviva also said 27 other businesses required "significant improvement".

Chief executive Andrew Moss was ousted in May following shareholder unhappiness at the company's poor performance.

Aviva's share price has fallen 35% over the past year.

Mr McFarlane took day-to-day control as executive chairman and launched a review of the group's 58 businesses.

The review revealed that shareholders thought the group was "difficult to understand", too complex and too exposed to the eurozone, he said.

And despite £1.3bn of restructuring charges over the last five years, the company was still perceived as "bureaucratic and inefficient".

"I genuinely believe our new approach will largely address stakeholder concerns," he said, "although we will need patience particularly from shareholders, as our plans are subject to execution risk and to the economic environment."

Aviva, which has 43 million customers worldwide, expects to complete its restructuring plan by 2014.

The company's share price closed up 1% at 284.2 pence.