Andrew Moss, 53, is group chief executive of Aviva, the UK's chief purveyor of insurance and pensions. After stints at Citibank, HSBC and Lloyd's of London, he joined Aviva as group finance director in 2004, taking over as CEO in 2007. In 2009, he initiated the rebranding of the company, which saw the ditching of the Norwich Union name under which it had formerly traded in the UK. The company currently has total assets of more than £350bn.
How's business?
Insurance companies have come through the financial crisis really well. People are still buying our products and as they're paying down debt, particularly in the UK, they're saving more money, so that works really well for us. And of course they're still insuring their homes and their cars, and small businesses are still insuring themselves. So while we're not immune to the economic situation, across most of our major markets we're doing well.
You recently announced that Aviva would focus on eight key markets in Europe, including the UK. Why is that?
We have strong businesses in the UK, France, Spain, Italy, Poland, Turkey, Ireland and Russia. In our business, scale matters, so if you have large, deep market positions, then that helps. We also have businesses in the States, in Canada and throughout Asia Pacific, but those are less mature. They'll come through and contribute more to profit streams but our view is that if you take a five-year view, there's no doubt that our profitability and earnings will be increased by focusing on our core markets in Europe.
Nobody's going to argue that some of our markets in Europe, say Ireland or Spain, are not facing difficult economic times, they absolutely are, but we're there for our customers for the long term. When you're selling a pension product, you're making a 30 or 40 year promise to your customers, so you need to take a long term view. We absolutely believe that our core markets in Europe will come through this difficulty we're experiencing at the moment and the customer demand is there for our products over time.
Do people in different European countries approach insurance in different ways?
The way they buy insurance varies quite dramatically. For example, more than 50 per cent of the motor insurance we sell in the UK is direct and a lot of that is on the internet. If you go to France, probably about three or four per cent of that kind of insurance is sold direct. Most of it is still sold through local brokers in the villages and towns.
You're keen to find ways for insurers to work with the government. What's the plan?
If you look at risk across society, whether it be pensions or healthcare or accidents on the road, for example, in the UK about two-thirds of the cost of that is borne by government, in other words by the taxpayer, whereas about one third is borne by the private insurance industry. The debate we're really having with government is if you were able to switch that by five per cent and get the private sector covering, say, 40 per cent of those risks, that actually saves the government £17bn a year. So it's a debate worth having. And the government, in today's economic environment, is very interested in that discussion. Nobody questions the principle of it, but we now need to bring it to life with a few examples. That's the challenge we have in the next couple of years.
When you wake up in the morning, do you feel excited about going to work?
Yeah, I wouldn't be here if I didn't enjoy it. It's a people industry. I spend time reading customer complaints and replying to them personally and it's very gratifying if somebody has a legitimate complaint and you sort it out for them. You are genuinely making a difference to somebody's life and that gives me a kick.
What do people complain about most?
Usually somebody's made a claim and they think we haven't dealt with it particularly well. When I look at a complaint, I look at it as a selling opportunity. Sometimes we have to put our hand up and say we haven't done something well and then put it right. And if you do that, generally the reaction is very positive.
Is your business affected by the fact that people are living longer?
In the UK there's a particular issue around that because of the provision of annuities. In the case of an annuity, a customer pays us a lump sum and then we agree to pay them a certain amount every year until they die. So the cost of providing that over the last 20 or 30 years has gone inexorably upwards. There's a lot of debate about whether people are going to go on living longer. It's possible that the generation who have been in their eighties or nineties in the last ten years or so were actually a particularly healthy sector of the population because of rationing after the War and that kind of thing. So with more modern living, whether it be junk food or binge drinking or whatever, people might actually revert to dying earlier! But that's for the actuaries to decide rather than me, I think.
Last year Aviva replaced Guinness as sponsor of Premiership Rugby. What was the thinking behind that?
Rugby is a fast-growing sport and gives us good coverage with our target market, which is the middle market here in the UK. And it has the added benefit for us in terms of entertaining distributors, brokers and financial advisors. So it works brilliantly for us. I'm a big rugby fan, but as always these things are based on research and empirical evidence as to whether they serve the company well!
Finally, as a rugby fan, who do you think is going to win the Rugby World Cup?
That's a great question. I have to favour New Zealand at home. As a team they've been playing well and if you look at the statistics over the years, when they're playing at home they're even more formidable. I've no plans to go, but who knows — if England get to the semifinal or final, that may change at short notice. In which case I might be calling on the services of British Airways at short notice as well!
blog comments powered by
