Trevor Matthews to succeed Hodges, despite thin general insurance experience
Aviva was licking its wounds this week after UK chief executive Mark Hodges, a talented and ambitious operator, walked out for Towergate, unwilling to gamble on whether he would eventually succeed group boss Andrew Moss.
Hodges would have faced fierce competition from chief financial officer Patrick Regan and external candidates, so instead he opted for the guaranteed job at Towergate, which offered the challenge of taking the consolidator to flotation and potentially earning a bumper share package.
Hodges’ departure will raise serious questions over Aviva in the City, which is underwhelmed by chief executive Andrew Moss and concerned that a successor to chairman Lord Sharman of Redlynch is yet to be announced, although ex-ANZ chief executive John McFarlane is widely expected to be appointed to the post.
The company moved to ease concerns by appointing Trevor Matthews, a former Friends Provident chief executive, as Hodges’ replacement. But, although Matthews had general insurance experience with Legal & General early in his career, most of his experience is with life companies.
UK general insurance chief executive David McMillan, played up Matthew’s credentials. He said: “I think most of Trevor’s career he has been around big financial services consumer and intermediated business. All that experience will stand him in good stead.
“We’ve got a massive amount of general insurance strength across the group. Pat Regan, our chief financial officer, is ex-Willis, ex-RSA and ex-AXA; Andrew Moss himself was chief financial officer of Lloyd’s. So I think Trevor’s experience will just enhance all of that.”
McMillan revealed that he had been busy on the phones, assuring brokers that it was “business as usual”.
He said: “Brokers I have spoken to are asking what has changed and what it means.
“The assurance I’ve been given them is that it’s business as usual. The relationships with me, Janice Deakin, Phil Bayles, with David Hall are still there, still strong and the strategy hasn’t changed.”
The decision to swoop for Hodges is being seen in some quarters as a strategic masterstroke by Towergate.
Former Aviva UK chief executive Igal Mayer’s drive to cut commissions failed, but the larger insurers would still love to trim their outlay to the bigger brokers.
With Hodges heading up Towergate, however, it is now likely to be harder to renegotiate arrangements. Hodges succeeded Mayer, and played a central role in building up premium with the consolidators.
McMillan indicated that the status quo was likely to remain: “Towergate has been a strong distribution broker partner for us for many years.
“We have a close working relationship with it, we get on well with it. Business is business, so there is a strong commercial element to it. I see all of that continuing as it has with Mark at the helm.”
We say ...
? Losing Hodges is a blow. Under his guidance, Aviva performed strongly in GI in 2010 and 2011, gaining back market share and improving combined operating ratio.
? General insurance executive David McMillan has proved a soft pair of hands, and he’ll play a crucial role in supporting Trevor Matthews, who faces a steep learning curve.
? Hodges was seen as a talented, young candidate to replace Andrew Moss. Now he’s gone, along with UK life chief executive Toby Strauss who has left for Lloyds Banking Group. Is Aviva doing enough to retain its top talent?
One of the best
“I think it’s sad that Mark left. He’s one of the best in the industry and he’ll be a great asset to Peter at Towergate. I think the last thing Aviva wanted was a change of leader at this particular time. We had a good relationship with Mark, but we’ve got a good relationship with all people on the life and general side.” Philip Hodson, Oval chief executive
“While we’re sad to see Mark go, I’m sure Trevor Matthews is going to get a warm welcome from the market. He will bring an international perspective, which is good.” Alex Alway, Jelf chief executive
The jury is out
“We’ve got to wait to see where he comes from and what his early day motions are going to be, so the jury is out for the time being. You’ve got to pay credit to Aviva for replacing people relatively quickly as well.” Brokerbility chief executive Ashwin Mistry