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LONDON (Reuters)—British insurer Aviva P.L.C. will sell undeperforming businesses in a strategic overhaul after irate investors forced out its chief executive last week, the company said Thursday.
Aviva's new strategy, to be set out in full in July, aims to shore up its capital base against its greater exposure to the troubled eurozone than rivals and to boost a share price which is down by more than 36% in the past year.
Aviva will get rid of those of its 45 units "where the prognosis for the future is not ideal," said Executive Deputy Chairman John McFarlane, in charge since CEO Andrew Moss became the most prominent victim of a "Shareholder Spring."
Britain's second-biggest insurer said it expected to take the rest of the year to find a replacement for Mr. Moss, who quit on May 8 and had led the group since 2007.
Mr. McFarlane, formerly chief executive of Australia and New Zealand Banking Group, rejected suggestions that his strategic review could pre-empt changes a new chief executive might want to make, deterring some potential candidates.
"As far as you're concerned, I'm the CEO. What we have to do is improve shareholder value as quickly as we can," he said, adding that he had been approached by some "very interesting" applicants.
Andy Haste, former CEO of rival insurer RSA Insurance Group P.L.C. and favored by some investors, does not want the job because Mr. McFarlane's review may limit any turnaround strategy, the Sunday Telegraph reported at the weekend.
Mr. McFarlane's shake-up comes barely 18 months after Aviva began a plan to sell off smaller businesses and cut the number of countries where it operates from 30 to 21.
Aviva, which generated 40% of its operating profit in mainland Europe last year, has been hit harder than its main British rivals by the eurozone's woes.
Aviva shares were down over 1.8% at 0925 GMT, lagging a 1% fall in the Stoxx 600 European insurance index.
The stock, which has underperformed rivals Prudential P.L.C. and Legal & General Group P.L.C. in the last five years, has fallen 8% since the start of the year against a 1.4% decline for the broader sector.
"With uncertainty over the European landscape and the management situation, we expect Aviva shares will continue to flounder in the very near term," Espirito Santo analyst Joy Ferneyhough wrote in a note.
Aviva also said its total worldwide sales for the first three months of 2012 fell 3% to £9.7 billion ($15.59 billion) because of weaker demand for life insurance in recession-struck Italy and Spain.