News Analysis: Changing course at Aviva

Aviva has been going through a mini-rejuvenation in 2010 after Mark Hodges took the top job at the beginning of the year and then installed David McMillian as chief executive officer of general insurance. In addition, the insurer is ready to welcome Anthony Middle as UK strategic partnerships director, having served six months gardening leave since June after leaving Axa.

Aviva's GI business even attracted a surprise £5bn bid from rival RSA this year, which was swiftly rejected. The price offered was surely an undervalued estimate given Aviva's brand strength and the amount of premium it has under its control: £3.87bn last year and £2.99bn to date this year, up £82m to this point year-on-year.

It has also marked its ambition in the corporate sector with an estimated £50m of premium set to be placed in 2010 and the appointment of veteran David Hall as managing director of corporate risks and specialty lines. The former Zurich big hitter was chief executive officer of global corporate UK business.

All of this comes after several years of turbulence as Aviva cut its headcount, cancelled hundreds of millions of pounds of contracts with managing general agents such as Fusion and Ink, and lost millions of pounds more business with brokers. One overriding positive of the Mayer years was his belief in supporting independent commercial brokers via Club 110 and Broking Independent Group.

Within the broker market, the chief beneficiary has been Janice Deakin, intermediary and partnerships director. Deakin has enjoyed 2010 and re-energised longstanding broker partnerships. Meeting Deakin, you can see a renewed enthusiasm for her job after a turbulent time, with former chief executive officer Igal Mayer contributing to some ruptures in broker relationships and a considerable fall in broker-generated premiums. She said: "We couldn't be happier where we are with brokers at the moment. Some feedback from some brokers about addressing servicing issues has been great, though there is always more we can do."

After some difficulties providing funding to brokers direct though Club 110, Aviva has called in Macquarie to enable it; the Australian bank is making waves in the UK broker market.

One area in which Aviva shows no signs of stopping is in its marketing spend, with a £20m four-year sponsorship of Premiership rugby meaning that brokers have even less trouble obtaining tickets with insurers such as QBE, Amlin and LV also having started a rugby marketing bonanza. Deakin added that its ad campaign with comedian Paul Whitehouse is set to continue and said that she is comfortable with his promoting both using a broker and a direct arm. Expect more adverts soon.

Meanwhile, Aviva is working towards greater access to e-trading for its underwriters and will launch its first product via PowerPlace in early 2011, a property owners' policy (see News round-up, p.10). It has also migrated a significant amount of business to its Fast Trade and Deakin admitted that online commercial is still very much a work in progress, though she said that the insurer is making progress with software houses.

Overall, 2010 has seen Aviva win back the confidence of many brokers but, with dwindling reserves, a prolonged soft market in commercial and an uncertain economy, there is a long and hard road ahead to navigate in order for the insurer to once again reach its profitability levels of 2005 and 2006.