Andrew Moss notched up his first full year as chief executive of Aviva on
Friday. Cue a huge staff party, cake and trebles all round? Not quite. The
man in charge of Britain's biggest insurance company spent the last part of
his 52nd week in office at a “summit meeting” with hundreds of his
employees, discussing their and the company's performance.
As an illustration of Mr Moss's 12 months in charge, it worked well. No
sitting on laurels, no complacency, no easing up, no looking back.
“We've been looking at the growth, the targets, stretching ourselves,” Mr Moss
said. Nor was it an isolated event. Mr Moss has called seven such “One Year
On” meetings since the spring, involving large chunks of the workforce
across Aviva's increasingly far-flung empire.
And he has combined these with a rash of on-the-ground visits to some of the
53 countries in which Aviva operates to gauge how the business is going.
Speaking in his office on the 22nd floor of Aviva's London headquarters in
the heart of the City's insurance district, he reeled off a dozen or so
countries that he had flown to in recent months, from Ireland, France and
Spain to Turkey, Canada, Russia and, even further afield, Singapore.
“People love it,” he said. “They find it energising. People love being part of
a big global organisation. There is quite a lot of change going on and
people like that. They find it attractive.”
It could be argued that they may find it a bit of a novelty. Only 12 months
ago, Mr Moss occupied the office next door as Aviva's group finance
director. Then he succeeded Richard Harvey, who left after ten years to
travel with his wife to Africa to work on charitable projects, and set about
transforming a self-conscious organisation renowned as the inefficient
result of numerous insurance mergers, from Norwich Union and CGU to General
Accident, CGNU and, finally, Aviva.
Despite its size, the giant punched beneath its weight in Britain and Asia
and, moreover, suffered from a restive shareholder base left particularly
nervous in the wake of the collapse of an ill-fated £27billion merger plan
with Prudential, the British industry's No2.
Mr Moss set about his task with enthusiasm. Indeed, even before his first day
in the chief executive's chair, he had carried out a review of Aviva's
corporate brokers, dispensing with the services of Hoare Govett. A new
external PR agency was brought on board. Patrick Snowball, the head of
Aviva's UK business and a rival for the top job, was shown the door.
Over the following months, he imposed a regional structure and executive team
on the group and put in place a bewildering array of performance targets. In
the United States, for example, where Aviva paid £1.6billion to buy AmerUS
in 2006, Mr Moss aims to double new life business within three years of the
acquisition completing. In Asia-Pacific, long-term savings sales need to
grow by at least 20 per cent a year until the end of the decade. In Europe,
the plan is to increase the same sales base by at least 10 per cent over the
same period.
And in the UK, a far more competitive marketplace, Aviva must increase its new
business sales “at least as fast as the market”, Mr Moss decreed.
“We are taking a pretty radical look at what we do,” he told The Times.
“Fundamentally, that's what I'm here for. Simply jogging along is not the
way.”
He divides his working life equally between Europe, Asia and the US, probably
spending about a third of each month travelling outside Britain. “The
regional structure has helped in that it does help you allocate time in a
better way,” he said. “It's a fantastic job, it's a privilege. What I don't
like about it? I don't like packing.”
Mr Moss admits that he formulated much of his strategy for the group before he
actually took the reins. Most notably, he had decided that the time was
right to ditch the iconic Norwich Union brand, an insurer for British
households for more than 200 years that was founded to provide fire cover
for residents of Norfolk.
Mr Moss, who has also abolished the name of Morley Fund Management, the
insurer's investment unit, is aiming to unite the group's occasionally
disparate offerings under a single Aviva brand.
He risks a backlash among consumers, in the UK at least, who may not be
prepared to extend the loyalty they feel about Norwich Union to Aviva, the
result of a £1million marketing exercise that is meant to suggest vivacity
but has no inherent meaning - but Mr Moss is unrepentant and, apparently,
worry-free, refusing to accept that he is taking a high-stakes gamble. “This
is very important for customers and for the people who work for Norwich
Union, but historically it has been run as a regional, disparate business.
It has to be about more than a change in the name. What you will see is a
company that becomes much more customer-focused.
“When I do get my senior management together, we spend the lion's share of our
time talking about how to make it happen. I'm confident that we will manage
that migration very successfully. We rebranded AmerUS as Aviva within one
hour of completing the takeover.”
Yet it is not just Aviva that has changed. The domestic business environment
in the UK has deteriorated sharply since last July and Mr Moss's first day
as the boss. The devastating floods of June and July last year cost Norwich
Union about £400million. While the insurer's balance sheet largely escaped
the vitriol of the credit crunch, the squeeze across mortgage and other
lending markets is beginning to redefine wider consumer behaviour.
Belt-tightening across the land could dampen sales of savings and investment
policies.
Even though Aviva's operating profits for the year to December rose to a
forecast-busting £3.29billion, and though investors applauded a 10 per cent
increase in the annual dividend to 33p, the insurer's share price has taken
a bashing. It has fallen from highs of 750p when Mr Moss took over to a
close of 482p last week.
Mr Moss has had his share of personal setbacks, too, not least the surprise
defection of Tidjiane Thiam, the charasmatic head of the insurer's
international operations, to the Pru. Mr Thiam becomes the Pru's finance
director and a de facto candidate for chief executive when Mark Tucker
decides to step down.
In addition, some analysts and investors had expected more fizz from his
strategy. One leading insurance market observer this year described it as
“decidedly uninspiring”.
Mr Moss, who argues that his actions have widespread shareholder support,
responds by saying that he is determined to be the man who finally puts the
group's legacy issues to rest, not least its hundreds of diverse IT systems.
He remains convinced that a “One Aviva” brand worldwide will make for a more
profitable and more exciting operator in savings and investments.
Yet, as he acknowledges, he is going into his second year at the top of the
group with the economic headwinds against him. Confidence among consumers
and his fellow business leaders is “very low”, he says, although he is sure
that inflation will remain under control, largely because of the fierce
competitiveness on the British high street.
On top of that, a correction in the housing market was probably overdue.
“Are lower [house] prices a bad thing? Well, actually, no,” he said. “Oddly
enough, these sorts of conditions could be beneficial to us, if only because
they get people to focus on the right thing, investing and saving adequately
for their retirement.”
In the last downturns of the 1980s and 1990s, the savings ratio actually rose,
he said, meaning that a downturn could send more customers through Aviva's
doors. This is by no means certain - “The primary effects of the credit
crunch have been well managed. The more interesting question now is how it
affects customer behaviour,” he said - but Mr Moss is in the process of
ensuring that if or when those customers materialise, Aviva, growing across
the globe, will be ready for them.
— Q&A
If you could change one thing in the financial and commercial environment,
what would it be?
More favourable tax treatment to encourage greater long-term saving
Who is or was your mentor?
I don't have one, but I do work with an executive coach who has been
invaluable to me in making the transition from finance director to CEO
Does money motivate you?
To a degree, but knowing that the people I lead provide prosperity and peace
of mind to 45 million customers around the world is what really makes me get
out of bed in the morning
What is the most important event to happen in your working life?
Becoming CEO of Aviva
What gadget must you have?
My tractor - I do my best thinking when I'm in the garden!
What does leadership mean to you?
Engaging people with a clear and compelling vision. It also means taking
responsibility and providing the right support for your team
Which business person do you most admire?
[Sir] Terry Leahy, of Tesco, for his relentless focus on what customers want
— CV
Born: March 1958
Education: Degree in Law from Christ Church, Oxford; Chartered
accountant
Career: Trainee accountant, Coopers & Lybrand; 1988-89,
vice-president and head of fiduciary compliance, Citibank; 1989-95,
assistant director, group treasury, Midland Montagu/HSBC Markets; 1995-97,
head of group asset & liability management, HSBC Group; 1997-2000,
chief financial officer, investment banking and treasury, HSBC; 2000-04,
director of finance, risk management and operations, Lloyd's of London; 2004-07,
group finance director, Aviva; 2007-, chief executive, Aviva.
Family: Married with four children
Other interests: Golf, rugby, gardening
