The Aviva UK chief executive has been with the same company all his career and has been reshaping the business in the last five years, bringing increased sales, and he is particularly proud of the improvement on the protection side, helped by a poignant television ad campaign Interview by Rachael Adams
Aviva UK chief executive Mark Hodges is not a company director with an arm’s-length management style. “People might say I am a little too hands-on but I say I like to get involved, not interfere.”
He has been CEO since 2010, heading both the life and pension business and the general insurance business and also has a seat on the Aviva board and the executive committee.
He says: “I joined Norwich Union quite randomly. I had trained as an accountant and Norwich Union was the biggest local employer. I thought I would be there for about a year but 20 years later, here I am.”
After stints as finance director and then managing director of Norwich Union’s general insurance business, Hodges jumped at the chance in 2006 to head Aviva’s life business.
“I had been in general insurance for 15 years. I had a wonderful time but this was a fantastic opportunity to come up to York and get involved in a business that needed a lot of change. The rest, as they say, is history.”
It would seem like Hodges’ task to overhaul the business is succeeding. The company’s most recent results saw pension sales rise by 19 per cent and general insurance business grow by 20 per cent to over £1bn but Hodges sees the 8 per cent increase in protection sales as the most telling result.
“Saying we have done pretty well on that side of things is an understatement. The advertising campaign certainly helped. We thought long and hard about how to get people to think about what is a very serious topic and I think Paul Whitehouse did a fantastic job in going from comedic to poignant. The campaign had an impact not only in terms of sales but also in terms of starting a debate.”
Hodges believes that protection companies should promote issues they feel strongly about themselves, rather than relying on industry bodies.
“Groups like the ABI can only represent the critical mass. The fact that we see something as important does not mean that everyone else does, and luckily we are big enough to promote these things on our own.”
Hodges also attributes Aviva’s success to its employees. The team’s most recent promotion is UK Life CEO David Barral who takes over from Toby Strauss, whose departure was announced last week.
“Building a good team is absolutely essential. I am a huge fan of David. He has his own management style but, in terms of company direction, his appointment does not signal any change to our business strategy.”
This strategy saw the combination of Aviva’s life and pension business with the general insurance business in 2010.
“We decided to bring some elements closer together, such as shared services, IT and banking relationships but some things we have kept very different, such as customer operations, distribution management, product development. The breadth and width of these two businesses means we can continually improve the quality of our service in a way that nobody else in the UK can.”
Part of this improved service is Aviva’s focus on technology. Hodges recognises there is stiff competition in this field, saying. “Fund supermarkets are popular, as are aggregators, but although customers like choice and they like to compare prices, they also like quality and clarity of service.”
Aviva has been heavily investing in e-commerce over the past few years, bringing online document access and online transacting to market. “I do not think anyone enjoys the thud of an insurance pack landing on their doormat. We are investing in things such as e-documents to make our online service first-class.”
Aviva’s technology offering also includes its wrap, which is merging with its Aviva for Advisers online portal to allow IFAs access to legacy business.
Despite the work Aviva put into the new system, Hodges warns that wraps may not be right for everyone.
“There are costs and complexities that go with them. If it is a relatively straightforward savings vehicle, for example, we should not put superfluous technology around it.”
But he does believe that wraps are the right solution for IFAs.
“We spent a lot of time talking to advisers and they said they wanted to be more efficient and to not log on to multiple systems and chase round internal processes. I would like it to become a one-stop shop for IFAs.”
Aviva has also been working to make advisers’ lives easier through the Adviser Academy, which has signed up 10,000 advisers.
“The short term aim was to provide a vehicle for IFAs to ready themselves for the RDR. Once we get to the other side, everyone might just breathe a huge sigh of relief. However, I do see the academy playing a role after 2012 because further investments are always required after a transition.”
This transition is not a bad thing, according to Hodges. “It is hard not to support the RDR. When you look at what it is designed to do in terms of improving consumer confidence, it has to be good. I am not sure I subscribe to the view of the regulator as heavy-handed. No one wants to see regulation for the sake of it but I do think we need a strong regulator so we are well represented in Europe.”
Hodges believes that although there may an initial drop-off in IFA numbers after the RDR - something Aviva has been vocal about in the past, publishing estimates of 11,000 adviser leaving - it will be short term because compulsory qualifications will make the industry more attractive.
Aviva currently distributes through around 28,000 advisers and this is not something Hodges sees changing. “There is a huge role for advice in the life and insurance industry. If you are spending £500, you may still see advice as a commodity but if we are looking at thousands of pounds, people naturally want someone to advise them.”
The RDR is not the only issue that Hodges sees affecting financial services.
“People need to save more for old age, and convincing them to invest in the sorts of products we sell is a huge opportunity. And once we come down from that really big issue there are things like Nest and Solvency II, as well as the move to a twin peaks regulator.”
However, these significant changes will not change what Hodges sees as the backbone of Aviva’s ideology. “At the end of all this, we have to remember that there is a customer and that we need to serve them well.”
Born: 1965, Romford, Essex
Lives: Norwich, with wife Julie, and four children
Education: Thorpe St Andrew School, then chartered accountancy and MBA in business management from Cranfield School of Management
Career: 1991-99: various financial management roles at Norwich Union Insurance; 1999-2005: finance director of Norwich Union Insurance; 2005-06: managing director of Norwich Union General Insurance; 2006-10: chief executive of Aviva UK Life; 2010-present: chief executive of Aviva UK
Likes: Norwich City FC, skiing and rugby
Dislikes: Bureaucracy, whingers and traffic jams
Drives: Volvo XC90 - I’m the kids’ chauffeur
Book: The Stieg Larsson trilogy
Film: True Grit
Album: American Idiot by Green Day
Career ambition: To stay sane
Life ambition: To stay sane
If I wasn’t doing this I would be…Skiing, playing rugby, cycling and playing golf</B>