Amanda Blanc confirms Aviva move to 80 Fenchurch Street

Aviva CEO Amanda Blanc said she was confident in the outlook for the business and hailed “tremendous progress” for the insurer as it reported its full year results for 2021.

On a results call with journalists, Blanc confirmed that the organisation, which had set itself a target of reducing its property footprint by 30%, would be moving its London HQ from 1 Undershaft, opposite the Lloyd’s building, to 80 Fenchurch St.

She commented: “It will be a 47% in footprint reduction and lead to significant cost saving.”

GWP

The results update showed that Aviva, as a group, increased its GWP £8.8bn, up from £8.3bn in 2020. Adjusted operating profit was £1.6bn, a 10% drop on the £1.8bn reported the previous year. It also improved COR to 92.9%, 4pp below what it recorded in 2020.

Blanc also stated that the insurer was on track to deliver further efficiency savings of £300m, partly achieved reducing its property footprint, rationalization of its product portfolio and simplification of its IT structures.

“We have a proven track record here. We announced today that we are on track to deliver the £300m of targets we set in 2018. The areas are simplification of the business, the IT estate, rationalisation of our product portfolio. Our property footprint. And looking at the simplification of the business, automating more, our digital investments have sprung to the fore. That has been really key.”

UK

UK GI reported an operating profit of £318m (2020: £182m), partly driven by a reduction in Covid claims. COR also improved to 94.6% from 98.5% in 2020. UK GI GWP was £49.bn (2020: £4.6bn)

In the UK, general insurance highlights were that UK commercial lines GWP went up 15% to £2.6bn (2020: £2.3bn), with UK retail GWP also up 3% and customers up 9% to 3.5m.

The 2021 report noted: UK commercial lines GWP grew 15% to £2.6bn (2020: £2.3bn), reflecting the benefits of investment in underwriting talent which led to strong new business growth, high retention levels and continued rate momentum.

“UK personal lines GWP was 2% lower at £2.3bn (2020: £2.4bn). Sales through retail channels increased 3%, more than offset by lower sales through our distribution partners and very low demand for travel insurance in 2021. Retail growth benefited from the successful launch of the Aviva brand on price comparison websites for motor and home, which helped to grow our market share.”

Blanc noted that the impacted of the FCA dual pricing rule changes had been “relatively quiet” for Aviva but noted there was inflationary pressure and they would “have to reflect the risk on average premiums due to inflation”.

Deals

The insurer also announced its acquisition of wealth management firm, Succession Wealth, in the 2021 results. Asked if the business was open to acquisitions in its GI division, Blanc did not rule anything out.

She told Insurance Age: “We are excited about Succession Wealth. The GI market is growing, and we have a very strong position in the market. We will look at M&A where it fills a capability gap.”

Blanc was also asked if Aviva was likely to be exposed to the recent non-damage denial of access clause ruling in the Axa v Corbin & King case. The business interruption case, which Axa lost, is set to have wider ramifications across the insurance space with a higher number, and higher value, BI claims predicted across the board.

Blanc explained: “We are examining it, as most insurers will be. We do not expect any material impact on Aviva.”

Brokers

On the regions, Blanc noted that UK GI CEO has “exciting plans” to grow in the regional markets and noted that the recruitment of regional underwriters is ongoing.

She commented: “We strongly believe in the impact of the regional broker market.”

Blanc noted in the results document: “2021 was a year of significant strategic progress, right across Aviva. We successfully completed the sale of eight non-core businesses, generating excellent value for our shareholders. Our financial position is strengthened and Aviva is now a much simpler, leaner business, focused on our core markets in the UK, Ireland and Canada.”

She also announced that all 22,000 Aviva staff would receive shares worth £1,000 to “share in the value they’ve helped create”

She concluded: “We’re going to take maximum advantage of our brand, our scale, and the strong relationships of trust we enjoy with both customers and intermediaries. We have everything in the toolbox to succeed, and with a refreshed, highly capable management team in place, we’re confident in our ability to make a strong business even better.”

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