Aviva’s UK chief executive beats internal candidates to secure the job
Towergate was celebrating an extraordinary coup this week, with the appointment of Aviva’s Mark Hodges as chief executive.
Hodges will take over from Andy Homer on 1 October. Homer will remain involved with Towergate as a non-executive director, but said he was looking forward to taking a break and would be careful to “get out of Hodges’ way”.
The appointment of such a high-profile and experienced market figure has been seen as a great victory for Towergate, and a vote of confidence in it pulling off an initial public offering in two to three years’ time.
As UK chief executive of Aviva, Hodges has experience of running a listed company – as does chairman Alastair Lyons, who is also chair of listed insurer Admiral.
Speaking to Insurance Times on Thursday, Lyons said: “Mark brings a great track record in the general insurance sector. He understands both broker and insurer work extremely well. He has built relationships in that world and has sat as a main board director in a listed company.”
Asked why Hodges had left Aviva, Lyons said: “He took a good look at the potential that Towergate has and, for anyone, the opportunity to be their own chief executive and run their own show is very attractive.”
Lyons said Hodges was unlikely to make major changes to Towergate’s strategy in the short term. Homer suggested he may look at opportunities in Europe and North America, but said that any major strategic initiatives were unlikely this side of Christmas.
Asked whether Hodges would overhaul the management team, Lyons said: “Mark knows our management team pretty well already and comes into the business with a view as to the success it has achieved. Obviously, any chief executive coming in needs time to take stock and work out how he wants to structure his management.”
Both Lyons and Homer were quick to emphasise that Hodges would be the face of Towergate, and would be fully in charge of the business from the moment he took the reins.
Homer said: “I’m going to get out of the way real fast. I don’t believe in joint bosses – it doesn’t work. Part of my role will be to keep out of Mark’s way and give him the support he wants; not to be on the sidelines checking what he’s doing.”
He said he was looking forward to taking up to 12 months off, and that he was committed to remain a non-executive director of Towergate for at least two years.
He said that the broker had a number of acquisitions in the pipeline, though a transformational deal was not part of its current strategy. In his non-executive role, Homer is likely to have a focus on acquisitions.
There were a number of internal candidates for the chief executive job. Commenting on this, Lyons said: “We have a very experienced, high-calibre management team that sets a high bar. I believe the management will look at Mark and see him as a credible leader of this business, with whom they should be capable of building significant success.”
Talking points ...
? How will Mark Hodges stamp his own identity on Towergate, given its deep association with founder Peter Cullum and his predecessor as chief executive, Andy Homer?
? Will the senior management team – some of whom were in the running for the top job – stick around to help Hodges settle in?
? Following Advent’s £200m cash injection, Towergate is ready to start buying again. Where will it start?
Pass notes: Mark Hodges
So what’s all the fuss about Hodges?
He is widely recognised as one of the most talented operators in insurance, a skilled negotiator, charismatic and brilliant with numbers. After losing deputy chief executive Amanda Blanc to AXA, Hodges’ arrival is a huge fillip for Towergate.
What are his credentials?
A qualified accountant, he worked with the Aviva group for more than 20 years. He was finance director and then managing director of Norwich Union General Insurance. He became chief executive of Norwich Union Life in 2006. As UK chief executive, he helped recover some of the billion in premium that disappeared when his predecessor Igal Mayer got tough on commissions.
What will he face at Towergate?
Hodges will take over at a good time. Towergate has the critical mass for flotation and will have liquidity in trading. The market capitalisation will smash past the billion-pound barrier. The £200m private equity from Advent has been used to pay some of its debts, easing City concerns. His greatest challenge will be building a respectable, united team the City can believe in.
The Aviva/Towergate timeline
June 2007 In the heyday of the happy relationship between Norwich Union and Towergate, Patrick Snowball leaves the insurer to join the broker as deputy chairman, in charge of its IFA business.
July 2007 Igal Mayer becomes UK head at Norwich Union. His public determination to drive down consolidators’ commissions leads to strained relationships with Towergate, which starts to take business away from the insurer in response.
June 2008 Patrick Snowball steps down from Towergate, following economic turmoil and the failure of the IFA business to take off as expected.
October 2009 Igal Mayer departs from Aviva’s UK operation to take on its North American and Canadian business. Towergate sheds no tears. Mark Hodges replaces Mayer, and the relationship between the two companies quickly returns to a surer footing.
December 2010 Amanda Blanc, the hot tip for the next chief executive of Towergate, suddenly departs for AXA, leaving the top job wide open.
February 2010 Towergate puts the Blanc debacle behind it, with a £200m deal with private equity backer Advent. The broker is ready to enter its second generation, and an IPO is looking more likely than ever.
April 2011 Peter Cullum stands down as Towergate chairman, passing the reins to Alistair Lyons. It’s only a matter of time before Andy Homer follows his example – but first, a successor must be found.
June 2011 Mark Hodges leaves Aviva for Towergate.