AvivaAug 5 2020

Amanda Blanc plots change for Aviva

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Amanda Blanc plots change for Aviva

Following the appointment of Amanda Blanc (pictured) as Aviva chief executive, the company’s share price jumped by more than 4 per cent.

Speaking to journalists on the day of her appointment, she hinted at some big changes ahead: “We will invest where we are sure it delivers sufficient returns alongside marked benefits for our customers. And where we see a value opportunity to invest in growth, we will take it.

“I’m not a business-as-usual person, and I have not come here to do a business-as-usual job.”

She praised Aviva for being a “well-known brand, with dedicated employees and a focus on delivering great service,” but added: “Aviva once set the tone for the industry. It was innovative.It was distinct. It had energy and ambition. 

I’m not a business-as-usual person, and I have not come here to do a business-as-usual job Amanda Blanc

“We need to be the leader in our industry again. I am convinced that Aviva has a strong and vibrant future.”

Key Points

  • Amanda Blanc is Aviva’s first female chief executive
  • Ms Blanc more than 20 years of industry experience
  • She aims to make Aviva an industry leader once again

 

Ms Blanc has joined Aviva at a time when, like many other companies, it is dealing with the impact of the coronavirus pandemic.

In May, Alan Devlin, a research analyst at Shore Capital, said while customer activity levels at Aviva had risen somewhat, more recently sales volumes for the year are likely to remain below expectations. 

He added: “Revenues in its savings and asset management businesses will also be impacted by financial market performance and economic activity as they are sensitive to asset values. 

“That said, we would note the bulk of earnings (around 80 per cent plus) of a life insurance company are from its back book, and new business sales drive the rate of growth, or decline, but the underlying book will remain profitable and capital generative.”

Doing the splits

Ms Blanc’s move from Aviva non-executive director to chief executive was perhaps inevitable after the appointment of a new chairman – George Culmer – in May and what Mr Devlin describes as the markets’ lacklustre support of previous chief executive Maurice Tulloch’s restructuring plans.

Mr Devlin says: “The restructuring plans underwhelmed the market – no major changes in the business model, no major divestments – although, because of Covid-19, they were never given the chance to work.” 

As a result, Mr Devlin says the appointment of a new chief executive will make another round of restructuring at Aviva inevitable, and given the markets’ disappointing response to Mr Tulloch’s restructuring, the pressure mounts to do something more radical, such as splitting the company (life vs non-life, or UK vs International), or at least make material divestments. 

“That said, we would note that the company has very valuable capital benefits from the diversification (such as the diversification benefits of having a UK life company with a Canadian non-life company), which may offset or negate any split,” Mr Devlin adds.

“As we have seen with Prudential’s split with M&G, business splits may sound exciting in theory but in practice they are very hard and complicated, and if they were going to create significant value, would likely have been done years ago.”

Insider and outsider

Like her predecessor, Ms Blanc comes from a more non-life than life insurance background, but she would have been exposed to life and wealth at Zurich – where she was European chief executive until 2019 – and she has already spent the first half of this year as a non-executive at Aviva.

Additionally, she has a view of the market not many financial services chief executives have; that of both provider and distributor. She was previously deputy group chief executive of insurance broker Towergate.

And when she started her financial services career more than 20 years ago, it was at Commercial Union, which merged with Aviva – then known as Norwich Union – in 2000.

Coming from outside the company – 20 years ago Aviva was a different beast – Ms Blanc can perhaps take a more independent view.

But transformational work is not new to her.

From when she joined Axa in 2011 as head of its commercial insurance business, to her final role as group chief executive of Axa UK, PPP and Ireland (before she left in 2018), she had turned the loss-making entity around and had taken it to a number two market position.

Key to this, according to Ms Blanc, was the delivery of a sustained period of organic growth and the disposal of non-core assets such as insurance broker Bluefin Insurance Services.

She left Axa to join Zurich in October 2018 as chief executive of Zurich for EMEA, but her time there was short.

Although it was reported she left Zurich due to personality clashes with Mario Greco, group chief executive at Zurich, this was denied by her camp, as reported by the FT.

A spokesperson at the time for Ms Blanc said: “Ms Blanc is adamant that she will not discuss reasons for her decision, except to say that it was only arrived at after long and careful consideration.

“An indication of the seriousness of this decision for her personally is that as a consequence she is required to stand down as chairman of the Association of British Insurers, the industry body, which it has long been her personal ambition to chair.”

Those close to Ms Blanc – who describe her as energetic, forthright and principled – say she would have made the difficult decision to leave Zurich aware of the perception some corners of the industry might have had about leaving a senior role after a short time.

A former colleague adds: “She is very empowering with people. She knows what she wants the business to do, so she will guide people towards this vision.”

During the year between leaving Zurich and becoming chief executive of Aviva, Ms Blanc, a keen rugby fan, became chairman of the Welsh Professional Rugby Board and joined the board of the Welsh Rugby Union.

Another of Ms Blanc’s big passions is transparency.

Transparency

While at Axa, she was front and centre in calling for the industry to be more transparent.

Critics of insurance companies say that, whether purposefully or not, they hide behind jargon customers do not understand; which often leads to a feeling of bad will among consumers who believe companies use questionable tactics to get out of paying a claim.

Taking the Aviva job means Ms Blanc will once again hear many introductions given about her being prefaced with the words: ‘the first woman to...’.

Indeed, she is the first female chief executive to be appointed by Aviva.

Ms Blanc has always said in her career she has never felt held back or helped because of her gender.

And although she is very conscious of what she represents to women and many who come from a working class background – as someone who came from a mining village in Wales – she has always wanted to be recognised for her achievements, of which there are many.

Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser