Mark Hodges will head new merged operation while Mayer heads to US

Questions surrounded the future management of Aviva’s UK general insurance business this week following the announcement that chief executive Igal Mayer is departing to lead the insurer’s US and Canadian businesses.

In his wake, the GI business will be merged with the life arm under its current chief executive Mark Hodges. Aviva said there would be further announcements in due course over who would have operational responsibility for general insurance.

Mayer’s departure follows months of rumours that he could be on the way out following a series of bust-ups with Aviva’s biggest brokers, the consolidators, and a stymied bid to raise prices.

Its timing was a surprise even to senior Aviva staff, however, who found out first thing on Tuesday morning, just hours before the official announcement. “I’m busy trying to find out what happened,” said one. “I’m hugely disappointed because he was making a real difference.”

The news follows the announcement that popular sales and marketing director John Kitson will be leaving in March 2010.

Mayer’s replacement, Mark Hodges, is well known and popular in the broker market following a stint as managing director of Norwich Union general insurance starting in 2005.

His appointment was welcomed by Towergate chief executive Andy Homer, who said: “We are very pleased to hear that Mark is coming back. He will hopefully restore our confidence in Aviva, given his track record of working with Patrick Snowball when Norwich Union was our number one insurance company.”

Broker Network chief executive Grant Ellis said: “Igal in his short time has certainly caused a stir.”

Aviva characterised its plan to merge life and GI in the UK as a bid to “bring further scale benefits and underpin future growth”. Rival insurers pointed that Hodges would hardly be able to run such a vast business alone, however, and anticipated major promotions or appointments soon. “Kitson’s loss was a big blow,” said one. “Now Hodges will want to bring in his own man.”

Aviva recently recruited Zurich’s Axel Schmidt as chief underwriting officer for the UK GI business.

Mayer’s departure was billed as a promotion by Aviva. The insurer refused to give any press interviews when the news broke on Tuesday, but Mayer said in a statement: “I feel regret that I won’t be here to see through and complete the journey of insurance excellence started over two years ago and which our brokers, partners and customers are just now beginning to see with the products and services we are launching.

“I have a real commitment and passion for Aviva and the GI business, and I have that same belief in the independent broker channel. I am proud of bringing that belief, clarity and focus to our business over the past two years, and you will see our organisation continue down this path, not just with words but with real investment as we air our new TV ad focused on the broker channel.”

Aviva group chief executive Andrew Moss said: “Mark brings a rare mix of operational and strategic expertise and an unparalleled knowledge of the UK market. He has a strong customer focus and a great track record in delivering strong financial and operational results.”