When not scaling a Munro in Scotland, Royal Liver chief executive Steve Burnett can be found considering the ascent of the Liverpudlian pension and insurance provider after a challenging and “painful” recent restructuring programme.
An avid walker, Burnett says his ideal days away from the office are spent traipsing across Tarmachan Ridge, near Loch Tay in Perthshire. The former actuary divides his time between his home in North Wales, his office in the heart of Liverpool and, at least once a month, Scotland’s Highlands.
Burnett’s love for adventurous pursuits has landed him in trouble in the past. Seven years ago, he and a party of colleagues found themselves caught out by severe weather atop a mountain in the Lake District.
“We were surrounded by sheer drops all around,” he recalls. Trapped in treacherous conditions, the group eventually found their salvation with a mountain rescue team. “I always put money in the charity box now.”
In 2002, Burnett left his job as Swiss Life chief executive to join Royal Liver and has led a rescue attempt of sorts of his own on a firm he dubs friendly but “very old fashioned”.
He says: “The building is very symbolic. It, like the firm, has been around for years, but it was standing still back then. The company was solid but stuffy and old. It had to face up to the realities of the market. It needed an injection of new blood and ideas to regenerate and modernise.”
Over the past five years, Burnett has climbed many a metaphorical mountain to deliver his modernisation strategy.
It has been a painful journey for many, halving the company’s workforce and cost base but he says the problems of high costs and an outdated product strategy have now been dealt with.
The company has reported strong progress in the first half of this year, with a strengthened balance sheet and enhanced capital position. Operating expenses in the first half fell by 27 per cent compared with 2006.
Burnett puts the success of the turn-round down to the dedication of his staff, both those who were already at Royal Liver and those brought in responded well to the change in leadership style. He says it was about striking a balance between modernising and building on the values of stability, honesty and compassion on which the 157-year-old mutual company has thrived.
“It was a challenge taking the firm from a bad place to a strong place. Our products were old, expensive and needed to be moder-nised. Customers were not buying them to the extent they had previously because they could get a better deal elsewhere.”
The direct salesforce was axed and Royal Liver acquired its own distribution business, Park Row, which is composed of a large number of certified financial planners, a middle tier of brokers and survivors from the salesforce. Burnett believes it is well placed to prosper under the plans of the retail distribution review.
Park Row has had a challenging year, following increased central costs associated with the integration of the managed salesforce in 2006 but Burnett is excited about its prospects and the potential for change in the sector.
“We are quite pleased with the RDR. we have a highly qualified bunch of people there and the remnants of the direct salesforce work well with an audience that has simple, generic needs.”
All the talk inside and outside the company of late, however, has revolved around the merger that never was with Royal London.
Burnett says that consolidation in the sector is probable and it was right for the business to consider the merger.
“My stance has always been that we are going to see some quite dramatic things happen with this organisation. They needed to understand what was going on. I have been very open and honest with them about the challenges but it came as a bit of a shock to some. We had to consider it because we have to run our company in a way that delivers members benefit.”
He says the decision by the board not to go ahead with a merger vote was a heartening one for him. “It represented almost a vote of confidence. There is a huge amount of enthusiasm for the strategy and existing team. It was a good offer but overall the board did not feel it was enough. The synergies were not that huge. The company has been through all this pain and the board are excited about the future.”
But Burnett is adamant that Royal Liver’s independent status cannot be assured. “There is no guarantee that we can continue to be an independent mutual. Mutuality is very important and we will do all we can to maintain it but it could well be in members’ best interests to give up independence at some point. The basic economics point toward it.”
Born: RAF Berlin, West Germany, 1956
Lives: Northop, North Wales
Education: Kingswood Comprehensive, Corby, Northamptonshire
Career: 2002-to date: chief executive, Royal Liver Assurance; 1990-2002: chief executive, Swiss Life; 1978-90: actuary, TSB Trust; 1974-78: actuarial student, Sun Life
Likes: Well spiced haggis, walking, photography, Leeds United
Dislikes: Whingeing, whiney people, overcrowding, Manchester United
Drives: Mercedes CLS
Best book: Scotland’s Munros by Cameron McLeish
Best film: The Magnificent Seven by John Sturges
Best album: Unplugged by Ten Thousand Maniacs
Career ambition: Seeing the mutual sector working even closer than it is now
Life ambition: To become a grandfather, although not too soon
If I wasn’t doing this I would be… probably lost somewhere on a mountain in Scotland, eating