Aviva boss Amanda Blanc ought to resist chopping much too deep to appease activist Cevian

When the activist investor speaks sweetly of newish CEO Amanda Blanc’s shake-up of the group so considerably, it combines the honey with some bitterly aggressive targets.

The unanswered issue: what if she fails to produce?

At to start with blush, the starkest desire is that £5 billion return to investors from her amazing run of disposals.

Really, while it’s higher than most in the Town are anticipating, it is not as demanding as it would seem. If all goes to strategy, the gross sales will fetch £7.5 billion. Blanc requirements to place £1.9 billion of that into reducing Aviva’s financial debt pile and keep a little bit a lot more to fulfill regulators, but it is achievable.

Far more scary is its need she additional than doubles the dividend.

Final year’s was cut to 21p and Blanc has promised “low to mid solitary digit” expansion. Probably 30p, tops. But Cevian desires 45p. That 15p distinction is an added £589 million. Calendar year in, 12 months out.

Absolutely sure, Blanc has some extra fat to reduce in the main organization that could be made use of to pay out divis, and the present-day market place for typical insurance plan is warm, but how prolonged will that last?

She doesn’t want to be in the scenario Aviva has discovered alone so typically in advance of where by it pays way too a great deal in dividends and leaves far too minimal to devote in the enterprise.

As the third successive Aviva CEO to minimize the divi on her arrival, she appreciates that much more than most.

The attractiveness of Cevian’s arrival for Blanc is that it validates her strategy as she pushes effectiveness reforms by way of the workforce.

The risk is, it forces her to lower too deep.