Daily briefing: Deakin's departure is not a total surprise

After 13 years at Aviva, intermediary and partnerships director Janice Deakin has made the shock announcement that she will leave to join Arthur J Gallagher as its UK commercial director.

It is a move that has surprised many brokers, for whom Deakin was their most-valued contact at the insurer and was generally seen as being Aviva through-and-through.

But her decision to leave has not come as a complete surprise. Deakin has hinted before that if she ever left the insurer, she would get into broking, and clearly Gallagher’s offer was too good to pass up.

But there are other factors not mentioned by Deakin that could have helped her decision.

Times have been tough at the group level of Aviva lately. The insurer made a £3.1bn loss in 2012, and its full-year dividend was cut to 19p from 26p.

In a statement from the insurer released last month, executive chairman John McFarlane said that the group’s overall performance was too poor to warrant any of the executive directors getting bonuses in 2012, or pay rises in 2013.

Aviva has around 400 such directors, and Deakin is likely to be included. But the decision to freeze pay and bonuses across the board will likely rankle with her and the rest of Aviva’s UK GI division directors, who might feel that they are paying for the poor performance of other divisions.

The UK GI arm delivered a solid performance in 2012 despite tough conditions, boosting operating profit by 3% to £448m (2011: £433m) excluding RAC. The UK GI combined operating ratio (COR) remained static at 98%.

There is also Aviva’s share price to be considered. The drop is bad news, to the extent that the executive directors’ remuneration is linked to it. On the day Aviva’s results were announced, the share price closed at 314.80p, down from 359.80p the day before. The price has since fallen more, and closed at 298.40p on 3 April.

But whatever the potential financial reasons, the main reason for Deakin’s departure is that she saw a chance to join a growing broker, and that chance was too good to pass up.

Perhaps it’s best to let Deakin sum up: “This was too good an opportunity to turn down. But it tugs my heartstrings. Going and being a broker is something I really want to have a crack at, and this is a great opportunity with a great business.

“I am hugely sad to be leaving Aviva. But one thing I really made my mind up about was I couldn’t change my stripes and work for another insurer. My heart has been in the broker world, and I am just going to the other side of it.”