As M&A grips broking, Aviva fights back

Aviva is investing heavily in smaller independent brokers in an effort to stave off the lure of the consolidators who are on a buying spree.

After the large-scale acquisitions of Oval, Giles and Jelf, there are not many big brokers left in the market.

So attention has turned to the smaller companies who are being courted by brokers backed by venture capitalists with a lot of money to spend.

Fewer brokers in the market will inevitably narrow the distribution channel for insurers.

As a result,  Aviva has launched a campaign called ‘On Your Side, By Your Side’ to support independent brokers and help them find alternatives to selling to a consolidator.

Chief distribution officer Phil Bayles (above, right) says the campaign will give regional brokers more practical support that makes running their business easier, helps them to make money and sustain their profitability.

The range of services Aviva is offering includes:

• Regulation and compliance;

• Marketing;

• Access to funding via commercial finance broker Integritas; and

• Access to independent consultants to speak with brokers about strategy, succession planning and growth opportunities.

“And when the time is right, it will help them to move on in a way that creates a legacy for their business, rather than being swallowed up,” Bayles adds.

“Independent regional broking needs to be defended by the brokers and insurers. Otherwise it will disappear. And the way you defend it is to support it and to help it flourish.

“A lot of brokers sell up and realise the business has destroyed what they have built up. But there is a way to nurture and grow your business, and pass it on to a like-minded broker.”

To drive its renewed fervour for supporting independent brokers, the insurer has promoted Karen Jackman to run its regional broker distribution, leaving Fraser Edmond to concentrate on the larger and international firms.

Strategy for growth

According to Bayles, a few years ago Aviva was too focused on the national brokers, but over time it has evened out its distribution – a strategy that is also helping the insurer to grow.

“If the business becomes too concentrated you give power to the distributor,” he says.

“When you have people walking in through the door saying we are really big, we are going to buy loads of people, give us more commission, we say that is not the way to develop a relationship with us.

“And we can say that because we have diversified our distribution. It might cut us off from opportunities, but working with brokers we are not culturally or strategically aligned to, is not going to go anywhere.” 

Best practice

Since taking on the role of chief distribution officer with overview of the direct, broker and partnerships channels, Bayles has pushed forward the insurer’s plans to apply best practice across all of its channels.

In the past the sales divisions used to sit in each channel, but now they sit across all the businesses. This has helped the insurer take advantage of cross selling opportunities.

It has also contributed to Aviva signing new deals with Homeserve and TSB.

He adds: “What you need to do is match resources to the right area. One of the reasons we have never sold much of the SME business into partnerships, is that when our partnerships were in a silo, there was no one that understood commercial business.

“We are trying to mix the capable and skills set so that we are bringing in new capabilities. This is an evolution of the sales and marketing role.”