Aviva to open up HNW distribution to regional brokers in 2023

“They will have probably a number of clients, but not a significant book, who are connected to their commercial customers. That is where we will go,” he commented.

The insurer announced the purchase of Axa XL’s private client business in March last year and followed it up last month by penning a deal to snap up Azur Underwriting’s high net worth personal lines business in the UK and Ireland.

Hemming noted that the former Axa XL business had been well integrated with “retention in the low 90s” which the provider was “very pleased” with and was now starting to process renewals under Aviva.

“Azur business will start to move over from March next year,” he continued. This will again be a 12-month process.

“At the moment both the Azur and the private clients business that we have brought in are not open to everybody,” Hemming acknowledged explaining that while brokers would not need a new agency it was currently about the level of ability to quote. “The distribution is restricted to a certain number of brokers to try and preserve service.

“With the combination of the Axa XL team, which is now the Aviva team, and the Azur team we will have more capacity for HNW underwriting. Our intent is to open up the distribution to HNW.”

Time

The Aviva boss indicated that the expansion will happen during the second quarter but stressed it would be done “slowly over a period of time”. And he flagged that part of the attraction for the Azur buy had been its ‘Smart Home’ online system for mid-net-worth.

“We want to develop that in much the same way we have developed Fast Trade,” Hemming summed up.

Results

In its full year results for 2021 Aviva reported 15% growth in commercial lines and a vastly improved combined operating ratio of 94.6%. It backed this up with 12% year-on-year commercial GWP growth in the first half of 2022, to £1.43bn, with the COR stable at 93.9%.

Hemming noted the provider had achieved the profitable expansion feat through both rate increases and winning new business.

“We have been very careful about the business we have grown,” he said. Professional services business, some segments of retail, tech and motor trade, were among the successful sectors he listed but added progress had been across the board.

“We are a pretty broad church,” he observed.

Underwriters

At the turn of the year Aviva revealed it would be boosting its underwriting team in the regions by 10% adding at least 40 new staff. By the time of the British Insurance Brokers’ Association’s conference in May it was halfway to the target.

The total now stands at 34, Hemming updated.

“I’m comfortable at the pace we are going as we are not compromising quality,” he said repeating that the insurer would not necessarily stop at 40 new regional underwriters. “Growth means we need to continue to recruit,” he pointed out.

And he reported that Aviva had also recruited 10 people for a “full on underwriting service” in its digital proposition.

The new digital service is the same as the mid-market teams around the regions with trained underwriters who understand Aviva’s appetite, Hemming explained.

“We want the decision making as close as possible to the broker,” he stated.

Continuing: “The commitment to the broker is if you start it digitally and it fails, for whatever reason, we will pick it up so you don’t have to start another process.”

This he maintained was different to the referral process – which ultimately brings a quote back into the digital system – as it led to the team of underwriters who will underwrite in a more traditional way.

“It is a way of saying try digital first and if it doesn’t work we will solve it for you.”

On digital Aviva has recently launched a cargo marine product with a freight offering to follow and has a cyber offering in build having already opened up its existing cyber policy to 600 trades on Fast Trade, he added.

Teams

Further recent changes at the provider have included splitting its commercial lines business into two divisions, SME and global corporate & specialty with Hemming leading the SME business in addition to his previous responsibilities when his job title was chief distribution officer.

Matt Washington has become managing director, UKGI commercial lines underwriting & GCS.

Hemming was adamant that it was not a restructure.

“The teams have not changed and their purpose is no different, it is just we have aligned the responsibilities at exco slightly differently,” he argued.

Fair value

In recent weeks Insurance Age has been full of stories about insurers being behind on their fair value assessments.

This all followed the Financial Conduct Authority taking aim at insurers for leaving fair value assessments to the last minute causing a risk of harm to consumers. The watchdog has had to give brokers a three-month extension, or ‘forbearance’ period, on product governance rules until 1 January due to the delays.

Hemming also argued that Aviva was comfortable with the timeline it had delivered.

“We have produced and provided all the materials that we need to provide so the brokers can do their assessments,” he responded stressing the information had been available for “some time” and Aviva was checking who had looked at it.

“It is there and being used,” Hemming assessed. “We are not being too intrusive into the brokers’ own business model.”

Best

In May Hemming had accepted that Aviva had “still got room to go to get back to our previous best”.

With the firm in a good position financially, expanding its headcount, investing in digital and launching new products to generate further growth, and confident it is working well with brokers on regulatory matters, is it then now back to its best?

“No, but we are getting closer,” he concluded.

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