Aviva has set aside £7.2 million to compensate its customers and advisers as a result of its rocky platform migration in 2018.
Last January Aviva moved its wrap platform from Genpact technology to FNZ with the migration causing a host of issues for IFAs.
Aviva Wrap UK's financial statements for 2018 said the company has set aside a provision of £10.7 million last year to cover redress payments.
This figure included £7.2 million for ‘remediation costs for customers and advisers impacted by the migration between platform service providers’.
A further £3.5 million was set aside to cover the ‘expected cost of policyholder compensation for errors identified in product administration’.
Many IFAs using the platform last year were forced to wait for several hours on hold trying to resolve administration issues. Advice firm Planet 3 Wealth said it was going to bill Aviva for the 708 minutes it spent on the phone attempting to resolve problems.
When contacted, an Aviva spokesman said: ‘Our priority has always been to put things right for advisers and our customers. Compensation ensures we meet our promise to make sure customers do not lose out as a result of last year’s migration.’
Overall the Aviva wrap platform recorded a loss for 2018 of £22.9 million, up from £13.7 million in 2017. This increase in losses came as Aviva’s new business sales on its wrap platform were 38% lower than the previous year at £1.6 billion ‘as a result of operational issues following the advised platform technology migration’.
In January the boss of Aviva’s platform Tim Orton left the business. The financial statements released today also showed Aviva Wrap director Billy Burnside left the business in March.
In February the platform’s parent company, Aviva Life Holdings UK Limited, bought 45 million £1 shares in the wrap for £45 million, providing extra capital for the business.
‘The company is seeking to expand market share and is loss making during the phase of development. The directors expect the company to become profitable as economies of scale are achieved,’ a line in the financial statements said.