The chief executive of Aviva UK is determined to prove to doubting IFAs that the company is their friend rather than their enemy and is offering a direct dialogue with advisers to help stimulate the industry.
Aviva UK Life chief executive officer David Barral says the reason he got into the life industry was down to money but he has stayed there because he believes in the great things it does for people. “We help them protect those most important to them.”
Having entered the life industry with Commercial Union, Barral then joined Abbey Life as a door-to-door salesman. “Abbey was a really tough job, I was only 18 and I was probably too young to sustain it. I did get my wife’s engagement ring with my third month’s salary, though.”
After a stint at Guardian Royal Exchange as a claim negotiator, Barral ran general insurance broker Andrew Yule Insurance for three years.
“It was before the Financial Services Act and I used to go up and down the street at lunchtime looking for trade. I enjoyed it but I knew I had to decide where I wanted to go - general insurance or life. I thought life would have more money in it.”
He joined Eagle Star as a trainee life consultant in 1986, an experience he describes as “the best training I ever had”.
After becoming top rookie in his first year, he was given the job of manager of the Edinburgh branch. “I was managing an English life company in the backyard of seven Scottish life head offices. That was a tough gig.”
He moved on to Cheltenham as Eagle Star’s distribution development manager and then to Prudential where he became national sales manager. He stayed at Pru until it bought Scottish Amicable and was then headhunted by Deutsche Morgan Grenfell to work on its client servicing side.
“I hated the job, really. I was hoodwinked a bit by the salary but it was not enough to afford a house where I wanted to live and the commute from Cheltenham to London was a nightmare. I chucked it after a year.”
Despite considering the world of golf product sales, Barral soon returned to the life sector. “I had to believe in the company. I got the job as IFA director of Norwich Union and that, as they say, was that.”
Fast-forward 11 years and Barral is still as passionate about the brand as he was when he joined. “It has always been quite a special place, with a heart and soul. That might sound soft but it has a fundamental purpose of trying to do the right thing.”
Company values aside, Barral is also delighted with the firm’s performance. Half-year results last week, showed a 3 per cent increase in profits and a 5 per cent rise in life and pension sales. “I am really pleased. We have undergone a massive transformation since Mark Hodges came into the life business. In 2006, our cost base was £2.5bn and this year it is £750m. Morale was low, service was dreadful and we have turned that round. The results reflect this progress.”
But there is one group that seems to remain unimpressed by Aviva’s turn-round. “IFAs will always talk about the things we do not do well. It saddens me that some of them want to have a pop at providers, especially when I have spent most of my career championing IFAs. In fact, 75 per cent of our business comes from IFAs. We are all trying to do the right thing for clients but before we do that we need to rebuild trust in the industry as a whole.”
Barral believes the RDR will help change consumer attitudes to financial services.
“Despite the arguments surrounding the pros and cons of commission, the fact is that the national media is never going to leave the issue alone. Clarity on what the customer is being charged for is the right thing to do.”
The RDR may also benefit Aviva, which is planning on expanding its protection business. “Protection will be something advisers get more interested in because it is unaffected by RDR. It is also desperately needed by consumers. Half the population is either underinsured or not insured at all, which is why we are pushing on this. Our strategy has been to drive the emotional engagement. I do not think many providers would have had the balls to do an advert like our Paul Whitehouse one.”
Aviva will be using a similar strategy in the autumn to advertise its critical-illness cover, part of a two-pronged approach which will start within the next month when the company announces its critical-illness claim data, which Barral predicts will be “better than anyone who has mentioned theirs already”.
Protection is not the only sector where Barral sees opportunities. “Employers will increasingly become the focal point for people talking about retirement. It is becoming clear that the Government will not provide for retirees and the advent of auto-enrolment and Nest means corporate pensions are a growth area. Our group personal pension business is up by 80 per cent this year and we are going to continue to invest heavily in it.”
Aviva already offers engagement tools to assist employees in understanding their benefits. “We have an online guide called Lisa who explains benefits and tax reliefs. Growing this is a core part of our strategy.”
On Barral’s personal agenda is the promotion of the open market option, which he will soon be discussing with Treasury Financial Secretary Mark Hoban. “Some of the rates being offered are scandalous. We have been working with the ABI, which has been trying to do the right thing by galvanising providers to reach a consensus but in the meantime, customers are losing out. If more people shop around, confidence will grow, which will expand the market as a whole.
“I am really keen for IFAs to work with us in stimulating the industry, so if any of them want to email me directly on email@example.com and have a constructive dialogue, then I am more than happy for them to do so.”
Born: East Kilbride, 1962
Lives: Harrogate, with wife and three sons
Education: Claremont High School, East Kilbride
Career: June 2011-present: CEO, Aviva UK Life; 2009-May 2011: chief operating officer, Aviva UK Life; 2008-09: marketing director, Aviva UK Life; 2005-08: distribution director, Norwich Union; 1999-2005: director of IFA business, Norwich Union; 1998-99: director of client services, Deutsche Morgan Grenfell; 1995-98: national sales manager, Prudential; 1986-95: distribution development manager, Eagle Star; 1984-86: manager, Andrew Yule Insurance; 1982-84: claims negotiator, Guardian Royal Exchange; 1981-82: sales associate, Abbey Life; 1979-81: new business life clerk, Commercial Union
Likes: Family, Thai red curry, positive people
Dislikes: Beige, lack of commitment and people who are all gloss and no substance
Drives: Aston Martin Vantage
Book: Florida Gulf Coast Fishing
Film: National Lampoon’s Christmas Vacation
Album: Hotel California by The Eagles
Career ambition: To convince IFAs we are their friend and not their enemy
Life ambition: To be the best that I can and see my children healthy, happy and debt-free. I would also like to catch a Marlin and ride a Harley
If I wasn’t doing this I would be…A professional golfer