Aviva’s Phil Bayles discusses with Insurance Times the principles every broker hoping to work with Aviva will need to meet

Aviva will only work with brokers who put the customer first.

This is the message of the insurer’s managing director of UK intermediaries Phil Bayles, who said if a broker and Aviva fail to share the same principles, the relationship will be terminated.

Aviva dramatically ended all agency with GRP in May, having previously ceased dealing with GRP brokers Alan & Thomas and Marshall Wooldridge.

Bayles wouldn’t comment specifically on GRP, but said it was his view that insurance works best when there is alignment between the insurer, the broker and the customer.

“Our strategy is really clear,” said Bayles. “We want to work with distribution partners who want to put the client at the centre.

“Treating customers fairly should be a central pole of any distribution strategy and it is in ours.

“And secondly we want to work with distributors who want to work in partnership with us.

“Those are our fundamental distribution principles, so if someone acts in a way which doesn’t put the customer first and clearly is acting out of self-interest then we won’t work with them.

“And if they are also clearly not interested in any form of partnership with the insurer then we won’t work with them either.”


Bayles explained that Aviva would work with any broker no matter the size, strategic model, or ownership structure. It was only the alignment of principles that was important to him.

“Insurance is funny because people act like everyone has to work with everyone else,” he said.

“But there are thousands of brokers out there. They don’t all have to work with Aviva and Aviva doesn’t have to work with them.

“It’s a voluntary process and we’re very clear that customers are best served when you have that alignment of interest between all the parties.

“It’s a really clear set of principles and the only real difference between us and others is the fact we’re willing to act on those principles.”

Since the Aviva split, GRP brokers have taken their agency to other insurers including Allianz, AXA and Zurich.

Bayles said he was not upset if other insurers or brokers held different principles, or decided not to act on them.

He revealed brokers and others in the industry have praised Aviva for their principled stance and that he was pleased that it set Aviva apart.

“Strategy is about making choices and everyone’s free to have their own strategy and make their own choices, whether you’re a broker or whether you’re an insurer,” Bayles said.

“The only thing we can control is what’s the right choice we believe for our customers and our shareholders.

“We’ll make those choices in line with those principles that we’ve said. If other insurers may have other principles or other strategies to pursue I’m not disappointed and I’m not surprised.

“In some respects, it creates clear blue water between us and our competitors and I’m very happy about that.”


But Bayles was keen to stress that the majority of brokers he has spoken with do put the customer first and want to partner with Aviva.

Aviva works with around 2,500 brokers and Bayles said he didn’t want to tar all brokers with the same brush when it came to behaviour, not in line with the insurer’s principles.

“Over the last two years we’ve been really clear saying if people are just hiking commissions for their own benefit it’s going to cost their customers and we aren’t going to be party to it,” said Bayles. “But that is by no means the whole industry.”

Bayles has historically been vocal in his opposition to brokers chasing higher commissions to the detriment of customers.

And he added: “Anyone looking to run a broker will need an 8% or 9% return.

“The best long-term way to get it is to integrate the business, make it efficient, leverage economies of scale and develop specialisms and brand to go on to win organically in the medium to long-term.

“The quick way to get a return is to go to everyone already there and say I want more commission.”

Aviva does not have a standard tariff of commission for their brokers. But Bayles said all commissions were paid to brokers within a very narrow range, with those at the upper end determined by economies of scale.

He said his issue was with brokers demanding commissions significantly outside of that range, without putting in any extra work.

He added: “Unless a broker was actually creating more value by reducing the costs to the insurer in the value chain or the claims ratio, where does that extra commission come from?

“The only place it can come from is if you squeeze the insurer’s margin, which is already pretty small, or the client price.

“So, you either infringe on the customer or you infringe on the insurer just to increase your margin from a healthy point to an even healthier point.”