New insurance boss Mark Hodges will have to watch corporate risks division carefully

Aviva is hunting premium income growth in the UK, and corporate risks should lead the way in that strategy.

It’s an interesting decision, that’s sure to raise a few eyebrows at some of the big ticket insurers including RSA, Allianz and Zurich who face stiffer competition from the biggest beast of the lot. The obvious question brokers will ask is: what is different from last time when Aviva pulled out of the market?

The main difference is that a large part Aviva’s book of corporate business was a legacy of the merger with CGU and Norwich Union. It was an inherited book which Aviva did not have the immediate expertise to grapple with. Instead of plugging on, it ceased the business. This time around Aviva is focusing its own resources and effort into corporate risks. It will have a dedicated team of 50 by the end of next year, based in London. Aviva certainly has the brand name and the expertise to court the attention of brokers. As one London market director puts it, Aviva will have to show they are committed and in for the long haul, especially after pulling out of the market in 2000. The source points out that even before the merger, Aviva wrote international business and large-scale premiums, so it can’t blame the merger for everything.

Scratching the surface you have to ask, was the fallout with the consolidators over commissions the trigger for Aviva searching new premium growth? Director of trading Phil Bayles says that was definitely not the ‘trigger’ and Aviva had been looking for new growth areas for some time. But you can’t help but wonder if the fallout helped spur on the efforts it put into corporate risks. The new division is something new insurance head Mark Hodges will have to look over, and whether he likes it or nor, his success or failure could easily be defined by the outcome of corporate risks.

Elsewhere, Aviva is looking at the insurance assets of ING as it looks for new growth areas. If anything, one thing is for certain, it’s going to be another interesting year for the UK’s largest general insurer.

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