What is happening in Japan, where FPI was applying for a new licence?
Aviva is not in Japan. There are a couple of opportunities the management of FPI are gifting to us as we take over the business, and Japan is one of them.
It is not absolutely confirmed.
We have applied for a licence, which is pending review and finalisation.
We are hopeful we will be granted that licence and we are keen to have it because we see a great opportunity as Japanese investors are looking to access investment opportunities in different currencies.
We would be in a fairly unique position if we were able to distribute foreign currency instruments for capital redemption products.
I can’t say much more than that at the moment but I am keeping my fingers crossed and hoping for the best.
What impact will the cost savings and job cuts targeted from the merger have?
The Asia infrastructure is relatively thin and the Isle of Man infrastructure is very specific to the business that is being run, so I can’t say too much more than that.
Frankly, we do not expect much implication to the Asian operations.
It is quite complementary in that Aviva’s head office is in Singapore, where there are only around 25 people in FPI.
It is primarily a sales and frontend office business.
If you look at Hong Kong, we only have about 100 people, and FPI has about 65 or so, and they have resources we have been trying to recruit.
We are quite happy to merge those operations and see where we can maximise synergies and capabilities.
Because the growth will be largely out of this region, cost synergies are not the focus.
What we are looking to do is identify the best talent and give them the best opportunity.
It [the Isle of Man operation] remains in the sense that that is where the core licence sits, and the operations we have in Asia and the Middle East are branches off that licence.
How do you see the offshore bond business developing?
I think we are going to focus offshore bonds into a specialist unit under FPI.
If you are referring to the UK offshore bond market then our priority has not changed much.
In terms of the overall offshore business itself, that is where we are very, very focused.
Overall, the whole environment is shifting.
It is about identifying which bits of the market we are going to be truly dominant in, and we have identified three clear areas.
First, we have to win in the post-55s space, in terms of pension reforms and tax changes.
This is a tsunami of change that is happening to our industry.
We believe that if you are scaled and you are good at it, then it is a better opportunity than if you are not.
Second, there is massive change in the corporate space with auto-enrolment going through.
It is a great time to engage and have a value-added conversation, whether through an IFA or by delivering a great digital experience.
Finally, we have made great strides in the protection sector, both in the bank assurance side as well as with the IFA’s growing its protection book.
The Friends business brings greater product capability, and so broadens our opportunity even within the UK space.
We are now looking to export that to our other markets, leveraging some of our really great leading-edge underwriting capability.
