My vision for Aviva

David McMillan must have one of the best office views in the whole of Norwich.

From the sixth floor of the Aviva headquarters in Surrey Street the chief executive of the company's UK general insurance division can take in a vista which sweeps from Chapelfield to the left and then around to the Forum and the City Hall clock and then beyond.

The office is large, bright and white, with lots of windows. Simply admiring the views must be an obvious temptation.

'I travel a lot during the working week,' he explained. 'This is really a sanctuary. It's a great office and it's good to spend time here. It's a place of reflection – and a place of action as well.'

Taking the overview is much at the heart of what the 45-year-old Scot is expected to do as he strives to put 'clear blue water' between the UK's largest insurer and its nearest rivals. But it is getting things right with front line staff on the ground which he sees as essential to Aviva's continuing success.


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He was appointed general insurance CEO in November 2009, as part of a restructure which was intended to bring general insurance and the life side of the businesses closer together.

Turning that ambition into reality has been based on a 'systems thinking' strategy which requires senior managers to communicate the vision to staff, who are also actively encouraged to speed up the claims process by, whenever possible, making decisions on the ground rather than passing them on to managers to deal with.

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'It's about getting people on the front line to think about what the customer needs and getting them to take ownership of the customers' problems and handle it first time, not pass it off to other departments,' he said. 'Early doors we are getting a really huge improvement from that.

'The other thing that's interesting about it is, not surprisingly, the people on the front line are incredibly motivated by it. They are looking outwards to the customers for direction. We are really trying to collapse the amount of time it takes to settle a claim,' he said. 'There's a clear linkage for the customer about how they feel about the business if we can settle claims quickly. We are trying to get people on the front line of the business that actually deal with customers to work out best how to deliver service. That's having a fantastic impact. We have got a number of branches across the UK, and the challenge for me is to get out and spend time there and not to be locked up here. Under systems thinking, the senior managers look to spend half a day to a day out there, just sitting next to somebody that's talking to customers.

'Our vision for the business is to be the most recognised insurer in the UK. We have achieved a lot already, but still think there is a long way to go with that.' And so far the vision has, crucially, produced results on paper, with the business posting six consecutive quarters of growth. When Aviva's half-year results came out in August these showed that general insurance sales were up 14pc to �2.22bn while overall UK profits had grown by 5pc to �1.3bn, which helped to increase dividends for shareholders.

'When I first came into the business, we had gone through a period where we had really tried to reshape the business,' he said. 'We had to take some difficult action on costs.

'We were really in a position where we had done the difficult stuff to get the business in shape, and what I was really trying to do was get the business back growing again. I also felt the business had become more narrow than it needed to be.

'There was a real market opportunity for us to get back into insuring the major PLCs. That's the business that's been growing quite rapidly for us.

'We have had a really good run,' Mr McMillan said. 'I came into the role 18 months ago and since then we have had six quarters of growth. That's not easy. We are the biggest life company in the UK by quite some distance and that comes off the back of 2010 which was a record year.

'General insurance delivers the most operating profit of all. In terms of operating profit we are three times the size of RSA, twice the size of Admiral. We've got a business that's doing well and we are quite ambitious.'

Yet insurance is a business which thrives on the studying and analysing the minutiae of risk and he said another factor in Aviva's success was they way it was combining knowledge built on hundreds of years of data from the days of Norwich Union with modern data techniques.

'We have really invested in the science of pricing and using data in order to give really tailored individual prices for things like home and motor insurance,' he said. 'That's really important for an insurer because it allows you to be really successful in the long run.

'Historically we have done a lot on flood mapping and we are working with several universities across the country to work out what the next generation of rating factors can be. We are fortunate because we have been around so long that we have got more data than most, which gives us a big advantage.'

But he acknowledged that there were other areas where the outlook is less serene for the insurance industry.

'We do not know where the UK motor industry has got to,' Mr McMillan said. 'We do not think it's good for the customers of the insurers. We have been actively lobbying the government that there needs to be some quite fundamental reform. We have got a situation in the UK were we have got two or three times the level of whiplash claims than France or Germany. Is it because we have got weaker necks than those countries or is there something fundamentally wrong with the compensation culture?'

'These costs are ultimately passed on to the customer,' he added. 'It's one of those things where there's a perfect confluence of interest. It's costing us money, but it's also costing the customer.'

The uncertainty within the Eurozone and the perilous state of both the UK and worldwide economies is also a concern for a company, which despite a narrowed focus on its core business, maintains a significant presence and exposure, in overseas markets.

'We have got big businesses in Ireland, Italy and Spain - getting them through the current crisis is important to us,' he said. 'It's in everybody's interests for the world economy to come through that. An insurance company, for all sorts of reasons, is at it's most profitable when the economy is growing. There are more assets to insure, more economic activity to protect, and people have more personal assets. A depressed global economy where it's difficult to invest isn't in our best interests.'

Beyond the workplace, the former Scottish schoolboy international footballer still likes to get out on to the pitch with one of his three sons as an under 11's coach for the Edinburgh Spartans.

'I'm one of two coaches, the other one from Barcelona,' he said. 'I'm a bit old fashioned and talk about commitment whereas he talks about ticky-tacky football and the Barcelona way! I tend to lead from the front and I am very passionate about what I do. I like to win. But we are trying to get the kids to play properly, pass the ball and work on their technical skills. It's all very different from my day. When I played it was water soaked pitches with no grass on. Our kids play on perfectly laid astroturf.

'But I think 11-year-olds are easier to coach and manage than the Aviva senior team!'

Married to Shirley, a human resources director with Scottish Water, he said weekends were often spent watching rugby or either on the golf course, or his bike.

'This year I took part in our leadership team's charity cycle ride from York to Norwich,' he said. 'We've had a lot of discussion about what next year's follow up should be. York to Norwich was 200 miles which is around There's some talk about going from Perth to Southampton.'

A graduate of Herriot Watt University in Edinburgh, where he studied economics and computer science, his first job was working in a factory environment before being recruited to be a management consultant in his late 20s.

'That allowed me to see a lot of different companies,' he said. ' Later I got into financial services and moved to London to work with PWC as a managing consultant working with banks. I made my first trip to Norwich in 1992, which was the first time I was in the Last Wine Bar,' he added.

He said a key part of the strategy was joining up general insurance, life and health care parts of the business so that 'consumers are seeing one company rather than three'.

'We are trying to pull off the three card trick - employees, customers, and shareholders,' he said. 'Happy and engaged employees means happy and engaged customers, which means happy and engaged shareholders.

'The last two years the brand has gone from nowhere to being one of the most well-known insurance brands in the UK.

'We have got more than 300 years of heritage and we have got fantastic reach in terms of expertise and know-how.

'It's about a massive commitment in terms of the customer and being up there and being one of the top brands in terms of service. It's about deploying our expertise in a way that makes things effective, and being bigger and better than our competitors.

'That's really where we want to be. Quite frankly the numbers will take care of themselves.'

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