The problem isn't Ireland -- real issue is with Aviva itself
IT'S easy to look at Aviva's decision to axe 1,000 Irish jobs and think of it as another inevitable consequence of Ireland's economic implosion or another failure by the Government to protect jobs.
It's easier still to come to the conclusion that "it's not them, it's us" when you listen to the company's claims of collapsing sales and unsustainably high costs.
But the truth is that there are plenty of reasons to believe that in this case, the problem might not actually be Ireland; the problem might be Aviva.
Take the "tough economic environment" claims.
Aviva Europe boss Igal Mayer told RTE that the general insurance market was "down 25pc" over an unspecified time period. That may well be true -- it's certainly fallen a lot since the peak and over some timeframe it surely fell 25pc.
But that's only part of the story. Aviva's own figures show that its recent fall in sales has been much more muted. General insurance sales were £513m (€590m) in 2008, £478m (€550m) in 2009 and £459m (€528m) in 2010 -- so they fell about 11pc over three years.
With Quinn Insurance under administration and seeing its market share contract from 12pc to 7pc, there was plenty of sales to go round for other insurers, albeit it in a declining market.
Take FBD, one of the only other insurers to release results. Its sales rose marginally in 2010 and fell less than 3pc in the first half of this year -- figures that paint a very different picture of the market than the one invoked by Mayer.
Then there's life insurance.
Mayer said life-insurance sales were down 50pc, once again over an unspecified timeframe. Nobody is denying that the life-insurance landscape is troubled -- the pension levy, the life-insurance levy, threats to pension tax relief and Ireland's economic woes have all taken their toll.
But the crisis was largely a 2008/2009 event -- sales fell only marginally last year and were down just 2pc over the first nine months of 2011 (though the trend has worsened in more recent months).
The truth is that Aviva probably is hurting more than its peers and experiencing a reality closer to the one Mayer painted -- but the reason for that is because the insurer lost its way.
The first signs came in the summer of 2008 when, with breathtaking arrogance, the London-headquartered PLC announced that it was ditching the 100-year-old and much-loved Hibernian name.
At a 'One Aviva' day in its swanky head office, executives made lovey-dovey noises about how the rebrand would be good for Hibernian, good for Aviva, good for everybody, implying that we parochial Irish journalists were somehow missing the point.
An expensive ad campaign followed back home, as Hibernian became Hibernian-Aviva, and then finally Aviva. A brand name with millions of goodwill attached to it was squandered. Recent sales trends suggest Aviva has paid a price for this.
And the insurer's home-grown problems didn't end there. Over the past few years, they created a European "manufacturing hub" to make life-insurance products for all across Europe from Dublin.
They transferred some of the best talent from Aviva's Irish operation into that European operation; people like former Irish chief executive Stuart Purdy and former general insurance boss Michael Murphy.
Then 'big Aviva' in the UK changed tack and talent began flooding out the door at an alarming rate. In early January, Aviva Europe boss Andrea Monetta announced his exit. Days later, Purdy confirmed that he was going, too.
Other senior executives, including Murphy and Purdy's replacement Jim Dowdall, followed. While Aviva scrambled to cobble together a new management team, competitors were eating its lunch.
Insurers like FBD responded to the evolving market dynamics by setting up a low-cost 'No Nonsense' version and RSA got into the low-cost market by buying 123.ie.
Aviva had initiatives, too, like the Ignition programme for young drivers who get cheaper insurance if they pass an assessment, but they failed to gain the same traction.
The uncertainty around the future of the Irish operations only served to exacerbate already-bubbling problems.
Rumours of this week's announcement have been doing the rounds since April, when Aviva began dismantling its European hub.
Aviva was once one of the most media-friendly insurers in Ireland, but this year it pulled the shutters down completely. Journalists with awkward queries were first fobbed off, then ignored completely.
Trade unions don't seem to have been kept any more in the loop and for months Aviva's staff have been waiting for the axe to fall. Under that environment, would you be motivated to sell insurance policies?
All that isn't to say that there aren't legitimate reasons for Aviva quitting Ireland -- 'big Aviva' obviously has some grand plan at play and clearly believes that it can generate more profits under a new structure.
The UK has lower costs than Ireland, they say, so it makes more sense to have roles there. And they argue, probably correctly, that Aviva Ireland just isn't big enough to support a head count of 2,000 any more.
In today's globalised hyper-competitive world, those kind of corporate decisions happen all the time; they can even be considered fair game.
But what's not fair game is opportunistically seizing on the Irish recession as justification for a decision that was more likely triggered by management's own failings and Aviva's internal agenda.