Aviva in US loss alert

Decision time is looming for Aviva chairman John McFarlane, who today admitted his company is too sluggish and bureaucratic.

The tough-talking Scot warned investors to brace themselves for a heavy loss on its United States arm, which is expected to be sold for about £1 billion over the next few weeks, half of what Aviva paid for it in 2006.

The company is understood to have received approaches from Apollo, Harbinger Capital and Guggenheim Partners.

McFarlane said Aviva was also in the final stages of appointing a successor to Andrew Moss, the chief executive who was ousted this year following an embarrassing pay revolt at the company’s AGM.

The decision is expected imminently with finance director Pat Regan the bookies’ favourite.

“Individuals, internal and external, have gone through rigorous external testing,” McFarlane said.

“The non-execs must interview the candidates and they are still taking place this week. I wouldn’t look for an imminent decision, but I am confident we will get the right person to head the organisation.”

Aviva shares rose today despite the company reporting a 5% fall in sales during the first nine months of the year to £28.9 billion.

McFarlane said he planned to cut the amount of red tape at the company.

“Culturally the organisation has been more used to collective decision making and has moved more slowly as a result, with more bureaucracy than desirable,” he added.