OTTO THORESEN is looking out of the window at Aegon’s headquarters pondering my question on why he became an actuary. I only ask because actuarial work doesn’t seem like the kind of job little boys dream of. “Well, I was good at maths and I suppose I wanted to do something with that,” he replies after a pause. Then he smiles and adds: “Actually, what happened was that I met an actuary at a careers conference who said actuaries made a huge amount of money and went on business trips to places like Bermuda.”
We are in Thoresen’s sparsely decorated office at Edinburgh Park. It requires some leap of imagination to confuse the sprawling complex on the outskirts of the capital on a winter’s day with Bermuda. “God knows who this guy worked for, but talk about mis-selling,” he says. Thoresen breaks into an even bigger smile, then he laughs. Very loudly. A laughing actuary. It’s a scary thought, but, then again, 49-year-old Thoresen doesn’t quite fit the mould for his profession.
For a start he’s got the indie legend PJ Harvey on his new iPod, or at least he would have if he could find the time to download the tracks.
He once owned a share in what he hoped would become a racehorse. It was sold off for showjumping. This is the sort of hard-nosed decisiveness that led to Thoresen spending his first year as chief executive of Aegon UK giving the company a good hard shake.
Aegon UK, which is part of the Dutch insurance and pensions group, suffers from a lack of corporate awareness because its products sell under brands such as Scottish Equitable. But you will hear more about it soon. Thoresen is embarking on Aegon UK’s first corporate advertising campaign, aimed at “business decision-makers”.
Having been with the company in two different spells, he did not wait long to implement a restructuring once he became chief executive, refocusing the business into two distinct areas — Aegon Corporate and Aegon Individual.
Then Andrew Fleming was made managing director of Aegon Asset Management UK, after Colin McLatchie paid for the arm’s dismal equity performance. Former Whitbread executive Bill Shannon was installed as non-executive chairman on Charles Monaghan’s retirement.
You don’t do all that without ruffling a few feathers, but if Thoresen is bothered it isn’t showing. “Even when I came back to the company in 1994, I had the odd run-in with some staff. I knew I had come back as part of a global business, and when I talked about Aegon’s view on things, that was thought to be wrong-headed because the prevailing view was that we were autonomous,” he said.
“For me, that global strength is an essential part of what makes us successful.”
Having started at Scottish Equitable as an actuarial trainee, he left for Abbey Life after 10 years, but was then head-hunted to set up Royal Life. “That was a key move, a typical Otto move,” said a former colleague. “He moved out of his comfort zone and built up some cracking contacts which proved very useful in his next job.”
That next job was back at Scottish Equitable, which had demutualised and joined Aegon. Thoresen was headhunted to set up Scottish Equitable International. By the time David Henderson retired as chief executive in October 2004, Thoresen was finance director and a certainty for the top job.
He described the company’s outlook before he took up the post as “conservative” and Thoresen is clearly no conservative. He’s even been known to go out with sales teams as they sell to customers.
The Scandinavian heritage helps. His Nordic features allied to a gentle lilting northeast accent mark him out as different. As does his name, despite the fact that he was born and brought up in Buckie.
Thoresen’s father was Norwegian, fleeing Norway when Hitler invaded, jumping in the first boat along with many others and ending up in Scotland. Otto Sr was a sailor and, after marrying a Scottish girl, continued his career at sea, leaving the young Otto in Buckie for up to two years at a time. “I struggled to get to know him,” recalled Thoresen. “My mother used to write a letter every night and I would post it on my way to school every morning. Then he would come back for three to six months.
“Suddenly this stranger would arrive. In my teenage years that was really difficult as I was the only male in the house until he came back.”
As Thoresen embarked on his own career, he still barely knew his father. “I never got close to him, although I knew how much he loved me. But what came after he retired was a closeness, a mutual respect, and I finally got to know him very well over the next 20 years.”
His father wanted him to go to university and get a secure job, both of which he did.
Thoresen recalls the relationship with his father quietly. But emotion is never far beneath his words. His father died a couple of years ago and he is grateful for the time they had together.
The ideals instilled by his father have left him with more of a patrician attitude to customers than his contemporaries. “We, as an industry, need to do more. Take group pensions. The move from defined benefit to defined contributions has led to all risk going on to individual employees. They invest in a fund the outcome of which may not be sufficient to fund an adequate level of income.
“In savings and investment, with-profits has essentially become debunked as a concept. Where people invest now, all the risk is on the client. In my view, we have gone too far. The industry has capability, expertise, strong balance sheets and it understands how it can design products to share that risk.
“Defined benefit doesn’t have to be final salary, for example. You can have a hybrid scheme that shares the risk between employer and employee because the employer is standing behind the cost.”
Thoresen admits that many people who should know better are at best apathetic about savings and pensions and thinks the Turner report is good news in broad terms, not least because it has led to a debate about the fundamentals. “The fact that people are living longer is at the heart of the challenges but industry still hasn’t responded enough,” he said.
“Some people are apathetic because the majority believe there is not enough there for them. We have to get them to engage.”
His own target for Aegon is to deliver profitable growth while diversifying in terms of the markets in which it operates. A move into annuities is just the start. “We need to deliver on what we believe we can deliver on the asset management side. There is real strength on the fixed income side but disappointment in some areas of equity management. Andrew Fleming’s appointment was all about taking control of that.”
The branding issue has led to agency cchm:ping being brought on board to come up with an advertising campaign that will be rolled out in the next few months. “I think there is an element of confusion but I am absolutely clear about where our company brands are positioned,” he said.
The UK is Aegon’s smallest market and it is not as big as rivals such as Standard Life and Aviva. While Thoresen’s ambitions are not limitless, he has set targets. “My actuarial training kicks in when I think that I’ve probably got 10 years to make a difference,” he said.
It seems you can take the man out of the actuarial department, but he never leaves his slide rule behind. Thoresen smiles again.
“The funny thing is, I did actually get to Bermuda as a result of being an actuary,” he says as he takes another look out of the window at the grey Edinburgh morning.
OTTO THORESEN’S WORKING DAY
AEGON’S chief executive wakes at 6am, and breakfasts on grapefruit juice, tea and toast. He drives 30 minutes into the office. Two days a week, he has a session in the gym first thing with his personal trainer.
Meetings generally start from 8.30 am. About 60% of his day is spent meeting with Aegon individuals and teams. External meetings account for about 20%, leaving 20% for “thinking time”. He finishes work at about 6pm if he is in Edinburgh.
Otto is in London two or three times each month and travels to Aegon summit meetings every two months.
He goes to a business dinner on average one night a week. Most evenings he catches up on work-related reading for an hour or so and also on a Sunday morning. He plays golf every Saturday morning.
VITAL STATISTICS
Born: April 28, 1956
Marital status: married with one son
School: Buckie High School, Banffshire
University: Aberdeen University
Salary package: Undisclosed
Homes: North Berwick
Car: Black Range Rover Sport
Favourite music: PJ Harvey and Miles Davis
Favourite film: Lost in Translation
Favourite gadget: 60GB video iPod
Interests: Golf and family
THORESEN’S FIVE TIPS FOR THE TOP
Leading an organisation is a great privilege. Enjoy it.
