On the trail of growth

As a 17-year-old student, Robin Spencer would help out with his dad’s Sunderland-based construction business. If he wasn’t out labouring, he’d be sweating over the accounts.

As a successful local businessman, Spencer’s father worked relentlessly, often seven days a week, to pay for his children’s private education. It’s a work ethic that has rubbed off on son.

Today, at 42, Spencer is the GI chief executive of Aviva UK and Ireland. The rapid ascent to the top hasn’t taken its toll on his looks: he still has a full head of hair, no grey, a youthful complexion and an ebullience to his personality.

In the evenings, he’s often out meeting brokers, but for today’s interview he still looks fresh and lively. “I don’t feel young,” Spencer laughs.

It’s as if you’re chatting with the school cricket captain after he’s knocked off a century and led his team to victory. But his relaxed demeanour belies the huge responsibility on his shoulders.

Asked how his background has shaped him, Spencer says: “I’m a guy that knows life does not come easy. You have to work really, really hard to get what you want. “My father demonstrated that and I think I benefited from it, as did my other family members. And you don’t take anything for granted. Never be complacent. You’ve got to be hungry, dynamic, agile.”

Some might wonder whether Spencer has the experience to run such a big business. In answer, he points to his track record with Aviva. After achieving a masters in economics he joined the insurer and quickly rose up the ranks, taking on major finance and risk management roles. His big chance came when he landed the job as chief executive of the Canadian business in 2007.

‘Insurers buying law firms and ABSs is them trying to find loopholes to continue exploiting the system’

Robin Spencer, Aviva

There was much to do: Spencer says he brought all the legacy businesses under one Aviva brand and led the re-underwriting of the billion-pound premium personal lines book back into profitability. Meanwhile, he re-engineered or retracted from loss-making broker partnerships and, on the affinity side, he trimmed the expenses base by exiting from an unprofitable deal with Loblaws, one of Canada’s largest supermarket chains.

Complimenting staff and management for their work in the transformation, Spencer says Canada is now one of the Aviva’s “jewels in the crown”. This achievement landed him the Aviva UK role.

Predecessor David McMillan left good foundations: a revamped personal lines book, a nice balance between consolidator and independent broker and a keen focus on underwriting profits.

So what are Spencer’s plans? He sees a real opportunity to write larger and more complex risks, although he says that this won’t be at the expense of SME brokers.

He’s enthusiastic about the newly created regional hubs taking on more of the larger risks. Instead of those risks being referred back to the team under London-based underwriting chief Axel Schmidt, he’s given authority for the regions to write them, under intermediary and partnerships director Janice Deakin. There will also be greater rewards for underwriting profitable business.

Tough commercial market
On personal lines, Spencer sees potential expansion into broker household accounts. Growth is all well and good, but the UK commercial lines market is particularly tough right now, with rates still fairly soft. Sensing the next question, he says: “Are we going to grow everywhere? The answer is no, because the underwriting cycles will not allow us to grow everywhere.”

Spencer is targeting price rises in commercial property and commercial motor. He’s also eyeing lower distribution costs for property; not necessarily from the broker end, but from the cut taken by the managing agent.

“There will always be some pockets that will be really tough. But there is never a silver bullet for dealing with that. It’s a whole host of small things that you can do to turn around the book,” he says.

On personal lines, Spencer stresses that, in the direct space, keeping a low-cost operating model will be top of the agenda. “We know we have to be very low cost and we know that pressure is going to continue,” he says.

Motor referral ‘welcome’
Spencer has been in the job five months, but he’s already seen a major regulatory change in the motor space. In September, the Office of Fair Trading referred the private motor market to the Competition Commission. What’s his stance?

“I welcome it. We lobbied on behalf of it. We think it’s the right thing that the OFT is looking at it. My desire is that we provide our customers with the very best price we can,” he says.

Another regulatory change on insurers’ minds is the Legal Services Act, dubbed Tesco Law, as it will allow businesses from supermarkets to
insurers to own legal firms or offer legal services, through alternative business structures (ABSs).

Spencer pulls no punches: “I don’t think insurers should need to buy law firms, ABSs and all those things. That is insurers trying to find loopholes to continue exploiting the system.

“My ultimate desire would be that it’s a first party system where if our Aviva driver goes into the back of somebody, then we as Aviva have the responsibility for fixing not only our customer’s car and any injuries, but equally the person they’ve gone into.”

From hauling bricks around to heading a Canadian insurance company that spans across six time zones and now being right in the thick of major UK consumer regulatory changes, it’s been quite a journey for Spencer but you get a sense there’s plenty to come.