The insurer tells Insurance Times its plans for mid-market broker investment and how it is tackling underinsurance
Aviva is planning to accelerate its investment in UK regional broking and grow the size of its underwriting footprint over the course of 2022.
Gareth Hemming, Aviva’s chief distribution officer, told Insurance Times: “Regional brokers have long been at the heart of Aviva’s distribution strategy and we continue to have a significant regional presence, with one of the biggest regional networks in the UK and more than 400 underwriters placed in the regions, aligned to where regional brokers are based.”
Hemming took over from Phil Bayles in April last year, who left the insurer to become Ardonagh Advisory’s chief commercial officer.
Hemming explained that Aviva has a long history of working with regional brokers - which he described as any broker that has an office in a region, for example PIB Group or The Ardonagh Group - as well as a large, digital presence in this field.
Hemming added: “Our focus has been on that market for a long time - it has been part of our heritage and continues to be. For independent brokers, we have things like Club 110, which helps them remain independent.”
Club 110 is Aviva’s invite only proposition for UK regional independent brokers. It was initially set up in 2007 to help brokers grow and prosper by offering free access to specialist solutions from expert providers, all backed and underwritten by Aviva. This includes agriculture, construction, freight, recreation and religion propositions, for example.
Hemming continued: “Our heritage has always been about making sure the mid-market and commercial business trades very well into the regions. We want to continue investing in that regional broker model.
”The broker market is particularly strong in that mid-market arena - there are local businesses dealing with local businesses. One of the things that makes Aviva different is that we are trying to underwrite at client level, not by line of business.”
Aviva has big ambitions, therefore, ”to drive some significant growth through that regional broker market” in 2022, meaning it will be continuously looking to “improve and invest in capability – be that digital, private clients or mid-market - over the coming weeks and months to ensure we continue to support those brokers as best as we possibly can”, Hemming confirmed.
Supporting SMEs and the mid-market
Alongside building its network of regional brokers and supporting this demographic, Aviva also intends to invest in SME commercial clients, added Dave Carey, Aviva’s director of mid-market and specialty lines.
Carey believes that although Aviva has been catering to SMEs for the last 10 years, there is now an opportunity to fill the protection gap for mid-market firms too. The insurer therefore started to explore products for this part of the market around three years ago.
Supporting regional brokers and mid-market firms, however, requires a large underwriting footprint across the UK - this is something Aviva is keen to develop further.
Hemming said: “We will be growing the size of our underwriting team in the regions by 10% initially. We will add to our existing underwriting talent across property, liability, and motor, as well as in speciality lines following our accident and health, cyber and management liability investments in 2021.
“We have already made good progress on this, with 20 underwriters recruited into those areas where we see the greatest opportunity and demand, right across the UK.
”Having plenty of capacity in the regions to work with the brokers, to respond to the customers, is really important.”
Digital investment
As part of its focus on regional brokers, Aviva has also been investing heavily in its digital capabilities - particularly around its etrade platform Fast Trade, which enables brokers to trade commercial, personal and specialty business digitally.
Carey said: ”Alongside our regional investment, we are driving investment in our digital channels to enhance brokers’ online trading experience.
”For example, we are expanding our online product portfolio to help brokers with hard to place business and we’re also increasing underwriting resources in the digital channel to improve our ability to handle risks that fall out of appetite and accelerate our speed of service on referrals.”
As for Aviva’s target demographic of mid-market and smaller firms, Carey continued: ”In the SME and the mid-market sector, we have developed a digital solution through our Fast Trade platform or Acturis etrade - we continue to invest. Our ambition is to ensure that where clients and brokers demand it, our product range is as wide as possible.
“Across commercial lines, our ambition is to grow in all areas of business.”
Aviva is additionally continuing to invest in technology that provides better access to data - this is so brokers can make informed decisions faster, Carey explained.
One example of this is Aviva’s Commercial Intelligence Tool, which launched in August 2021. This uses artificial intelligence to address underinsurance.
The tool can pull together the insurer’s own data, as well as open source data to enhance underwriting - it achieves this by identifying buildings with potential underinsurance, assets that have not been reviewed for a while and other potential coverage gaps, for example.
Carey said: “Our investment in the front line is to build upon our existing strength in the regions and to add to the capability in areas where we need it to service our brokers more effectively in 2022.”
PASS NOTES
How did Aviva support commercial clients during the Covid-19 pandemic?
During the Covid-19 pandemic one of Aviva’s responses was to make sure existing insurance policies extended to cover remote working, for example.
Dave Carey, Aviva’s director of mid-market and specialty lines, said: “A number of SMEs have had to evolve their business operations and our focus is to work closely with the brokers to make sure that the solution that we are offering continues to be adequate to the risk.”
Plus, it is also important to keep abreast of whether businesses have had to adapt their business functions in light of lockdown restrictions, Carey continued – such as restaurants offering takeaways and outdoor seating.
Aviva’s chief distribution officer Gareth Hemming added: “We believe that the advice that brokers give is invaluable - our job is to be behind the brokers to fulfil that advice.”
What other challenges are brokers facing when serving mid-market clients?
One challenge in the mid-market broking sector is inflation, according to Hemming. This is especially pertinent in the construction market, as cover typically needs to be appropriate, yet still affordable for Covid-hit businesses.
For Carey, the key to addressing this is the time brokers and underwriters spend together in conversation to understand clients’ needs.
A further challenge identified by Aviva’s Broker Barometer, which was published in August 2021, is the hard market – more than a third (38%) of the 220 UK brokers polled predicted that the hard market could last between 12 and 18 months.
Hemming continued: “The hard market conditions we are seeing across commercial insurance have made for a really tough trading environment for brokers and are likely to continue for some time.”
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