Aviva sets deadline for offers on branch network
INSURANCE giant Aviva has set Friday as the deadline for first-round offers for its 26 Irish branches. The company is hoping that its portfolio will attract strong interest from insurance brokers and that these will take on some Aviva staff.
The news comes about a month after it emerged that Aviva was reviewing its "property footprint" with a view to selling between half and all of its branches across the country.
The Irish Independent has learned that Aviva is now set to sell all of the branches, but is hoping that most of them will go to brokers who may be able to offer jobs to existing workers.
First bids are expected by the end of the week, but the process is likely to take several more weeks as Aviva deals with potentially overlapping bids.
"You could have a situation where one person wants six branches, someone else wants eight, but there's one branch they both want, so you have to see what they're both willing to settle for," said one source. "That takes time."
Bids are expected to come from a mix of pure property investors and insurance brokers. The new owner's ability and willingness to take on staff is expected to feature prominently in Aviva's decision-making process.
Industry sources said there was likely to be "good" interest in the Aviva branch network, as expanding brokerages look to move into new towns and brokers already there consider buying the sites themselves, so they won't face a new competitor.
"There are some branches in very good locations," said Brian McNelis, director of services at the Irish Brokers Association. He added: "I'm sure they will be attractive to some people."
Aviva's decision to close down all its branches stems from its new philosophy of no longer competing with brokers who are also selling Aviva products.
Mr McNelis said Aviva had traditionally had a "very strong relationship" with brokers which dated back to its Hibernian roots, but that it had "probably suffered a bit" in recent years.
Insurance sources said that the broker relationship would improve when Aviva was focused solely on supporting brokers and was no longer competing with them through an Aviva branch down the road.
The new focus is likely to be particularly significant for Aviva's efforts to increase its presence in the commercial insurance market, since this is overwhelmingly written through brokerages.
While selling the existing branches on to brokers could potentially reduce job losses at Aviva, sources said it was too early to speculate on how many roles could potentially be saved.
Aviva is in consultation with unions about plans to cut up to 950 jobs from its 3,000-strong workforce.
The insurer has blamed the cuts on falling profitability in Ireland and the challenging insurance markets. Some functions are also being transferred to the UK.