Dame Amanda Blanc
We have radically simplified Aviva, we are financially strong and we are utterly focused on transforming and growing the business. Whilst I am pleased with what’s been accomplished, I am clear there is significantly more value which Aviva can and will deliver.
Amanda Blanc is the Group CEO of Aviva, the UK’s leading insurance, wealth and retirement business.
Amanda was born and bred in Wales, having grown up in the Rhondda Valley, and many of her family still live there.
She started her career as a graduate at one of Aviva’s ancestor companies, Commercial Union. Following success in senior executive roles across the insurance industry, she came back to Aviva as CEO in July 2020.
Priorities at Aviva
Amanda has greatly simplified Aviva, successfully divesting eight non-core businesses. Aviva is now focused on our core markets in the UK, Ireland and Canada. Amanda has also overseen a significant strengthening of Aviva’s financial position.
Amanda is now focused on accelerating Aviva’s performance: capitalising on the structural growth opportunities in our core markets; providing customers with a simpler, more personalised offering; transforming our cost base and delivering our market-leading sustainability commitments. Aviva is the first major insurer in the world to target becoming net zero by 2040.
Watch our Group CEO, Amanda Blanc's half year results 2023 video
Transcript for video Amanda Blanc's 2023 half year results video
Hi, Smera it’s absolutely lovely to see you.
Thank you very much. How are you today?
I'm really good. Thank you very much.
So we’re at the half year point.
How are we performing?
So, look, first of all, let's start by thanking everybody for the performance. I think that our Aviva colleagues have once again made it click for our customers and done a really, really fantastic job. And you'll see that through these results. I think we've got some real momentum despite the challenging macro-economic backdrop.
Aviva has actually performed really strongly in the first half. We have delivered profitable growth, so, you know, all parts of the business are showing that growth. And I think that what we've shown is that the diversified business model and the right strategy are working really well for us.
That sounds great. So what are the key highlights for you at this half year?
It's hard to pick a few things, but if I was to focus on, you know, the core markets and the three GI businesses have delivered double digit growth in each of the markets; in Canada, Ireland and in the UK.
So in the UK business, Adam and the team have delivered really strong growth in SME and in mid-market.
In Canada, Jason and the team have delivered 16% growth in Commercial Lines.
Doug and the team in the Wealth business have actually delivered 100 billion of assets under administration on the Workplace platform.
That is a real achievement.
And Mark and the team have originated over half a billion of assets which support the annuity business.
So I think a really strong performance from all of the markets.
That's really great. That's really impressive. Now we talk about our four strategic priorities. This year is about the year of the customer. So how are we delivering for them?
Yes. So I mean, we're really passionate about delivering for the customer. We have over 18 million customers across Aviva and 16 million of those customers in the UK.
And so it's really, really important that we deliver, you know, what we say we're going to do for our customers.
So some of the things that we've delivered that I'm particularly proud of; the COVID Health Pledge. We've delivered £128 million of that COVID Health Pledge now, which is something obviously we promised to do when COVID struck.
The second thing, which I think has been brilliant, is on the Direct and Adviser platforms.
Instead of holding on to any of the increased interest, we've actually paid that interest in full, back to the customers who have cash balances on that platform.
That's something that I think, you know, we are very, very proud of.
We've digitally built our propositions for all of our customers and we have really good improvement on our customer journeys.
And the final point I think worth making on customers is we now have 6 million customers using MyAviva, and that's important for them because it makes their life easier.
It's also important for us because a MyAviva customer is twice as likely to buy another product from Aviva.
So, you know, all in all, I think strong delivery for our customers this half year.
Thank you. That's really great.
So can we talk about the other three priorities and how we're delivering against them?
Yes, of course. So let's focus on growth. You know, I think here I've spoken about the growth in the General Insurance businesses and the Wealth platform, but there are some real specific things here that I think are really great.
Aviva Zero, which is something that we launched 18 months ago, has delivered 250,000 policies so far. So that's really, really good growth and that's our digitally led carbon conscious motor product.
We have secured the Barclays back book which is another 350,000 customers that are now directly Aviva customers.
And we're seeing positive flows onto the Aviva platform from the business that we bought last year; Succession Wealth. So in growth, I think we've really delivered in the first half of this year.
For efficiency, some real strong shout outs here too.
First of all, we've streamlined the IT platform. We've simplified our product set, which makes it easier for our customers and also for our colleagues.
We've actually produced more investment in technology, which means that we're more efficient. We've reduced our property footprint. And as a consequence of that, we've been able to announce today that we have achieved our cost reduction target of £750 million, one year early. Now that I think is a terrific achievement, especially set in the context of the inflationary environment that we're operating in.
And then finally, on sustainability, have actually achieved three years early, 100% of our global energy usage from renewable sources. So, you know, that again, is something that we are incredibly proud of.*
That sounds really strong and positive. What's the one key takeaway you'd like everyone to take from today?
So there's probably more than one key takeaway. But I think the overriding thing I want everybody to take away is that we've really got some momentum here.
We're delivering growth. We're delivering for our customers. We're delivering profitably, and also we're delivering cost efficiency. But also we're delivering for our shareholders.
There’s a growing dividend and also regular and sustainable returns of capital.
But we don’t intend to stop here. That momentum that I talked about is coming through in those four strategic priorities. So it’s a really really exciting time at Aviva.
That's really great. Thank you so much for spending some time and talking me through the results.
Thank you very much.
*In 2022, we achieved our goal and now ‘match’ all our electricity to renewable sources in our core markets of UK, Ireland and Canada.
Amanda was formerly Group CEO at AXA UK, PPP & Ireland and CEO Europe, Middle East, Africa & Global Banking at Zurich Insurance Group. She also held executive leadership positions at Towergate Insurance Brokers, Groupama Insurance Company and Commercial Union.
She has previously served as Chair of the Association of British Insurers, Chair of the Insurance Fraud Bureau and President of the Chartered Insurance Institute.
Qualifications and responsibilities
Amanda is an Associate of the Chartered Insurance Institute and has an MBA from Leeds University. She also holds a BA (hons) in history from the University of Liverpool.
In 2020 Amanda led the Government’s independent review into flood insurance.
In 2021, she was appointed by HM Treasury to the role of Women in Finance Charter Champion and has worked with Bain & Company to design an industry-first blueprint with practical recommendations that organisations can use to boost representation across Financial Services.
In July 2023 Amanda was appointed to the Prime Minister's Business Council.
Amanda is also Co-Chair of the UK Transition Taskforce, which is developing a gold standard for private sector climate transition plans.
Amanda is a Non-Executive director of BP plc, a company listed on the LSE, Frankfurt Stock Exchange and NYSE. Amanda is also a member of the BP plc Remuneration Committee and People and Governance Committee.
In December 2023, Amanda joined the Board of the Association of British Insurers.
Amanda was awarded a Damehood in the King’s New Year Honours in January 2024.
You can download a photograph of Amanda from Flickr.
Watch Amanda's recent interview with CNBC
Transcript for video Watch Amanda's recent interview with CNBC
Well, let's get to Amanda Blanc, who is the CEO of Aviva. Always love speaking to Amanda Blanc. Good morning to you, Amanda.
Well, I've gone through some of the numbers, but how would you typify the quarter? Very good to see you.
Yeah, really, really good to see you. And very interesting hearing your debate there on inflation. Look, I think that we've had an excellent first half. What you see in these results is some strong trading momentum and double-digit growth through the General Insurance businesses, strong growth in health, protection and retirement, good wealth flows, but also strong profitability growth to 8% operating profit.
And I think what you're seeing is the benefit of having a diversified business model. So, we're very fortunate that we benefit from the General Insurance and the Life parts of the business.
The UK down, a lot of real reasons why one should be slightly concerned about the UK economy, especially relative to some of our peers as well. Do you see some of the key factors in the UK economy actually beginning to creak a little bit and as such creating potential problems for your business?
Well, you know, I think we definitely are concerned, obviously about the performance of the UK. We've got nearly 16 million customers in the UK, so it's really important to us that the UK is successful. I think what you're seeing is basically opportunities and challenges. So for example, our workplace business, which is our defined contribution pension business, we're seeing 25% growth because that wage inflation data that you saw yesterday is coming through in those workplace schemes and other parts of our business, such as the health business, what we're seeing is with the difficulties that the National Health Service is encountering, we've seen 58% growth in our health business.
That's 170,000 more customers over the last 12 months. You know, on the opposite side of that, what you're definitely seeing is in our advice platform that flows are down because customers are really thinking about where they're allocating their cash. So, you know, I think there are opportunities that go along with those concerns clearly that we have.
Amanda, I want to pick up on your interest in the inflation story here in the UK, because I spoke to three major insurers last week and they're all putting down the increases in premiums to the inflation story in the backdrop. And as I take a look at your numbers today, for the UK and Ireland, general insurance premiums up 13%.
This is basically double now the inflation rate. Is there an argument that the premiums have to slow because inflation is slowing?
Yes. When you look at our gross written premium numbers, what you're seeing there is a combination of rate and obviously new business coming through. So that 13% is roughly 60:40 in terms of rate and new business. But clearly, what we are seeing is inflation numbers coming through on it, particularly the motor products where, you know, used car prices have been high.
You've seen parts being high, you know, actually repairing the vehicle costs increasing. But equally, what you're also seeing here is frequency coming back to more normal levels in motor insurance, post-COVID. So, you know, those numbers are effectively off a flatter base in previous years.
So, Amanda, as you break down the premium story for us, what level of increases can we expect from here? And I know there are different components, but roughly if you go through the numbers, what do you anticipate in terms of the increases?
Yeah, well, look, I think it depends on the the line of business. In our commercial lines business. We're sort of seeing about 8% increases. But all of those businesses have what we call index linking included in them. So effectively, you know, it is more than that if you include index linking. But in in the personal lines business, which many of your viewers obviously will be interested in, we are seeing very, very strong rating increases to counter that inflation and also those frequency impacts.
So, you know ,what the outlook for that is? I can't say the exact number because effectively we are pricing on a day to day basis as we're seeing the data come through. But new business prices have increased significantly in the first half of this year.
Amanda I've lost track with which cunning new plan the government is working on now. Edinburgh reforms, Mansion House reforms, you name it. But there is a case to answer for the industry to spend more money or to put more investment into the private sector. I get that as well. But do you have great concerns that if you just go into this area in too much scale, it's going to make it very, very difficult to smooth out that return on equity?
I know it came in at 10.8% in the first half of the year, i.e. it's going to add volatility to your balance sheet.
Yeah, so I mean, it doesn't add volatility to our balance sheet because in defined contribution funds, which is what the Mansion House Compact was talking about, effectively that is, you know, our savers into pensions, deciding how they want to allocate their funds and obviously us looking at whether or not if we have a default fund, which includes a 5% allocation, it's only 5%, to private businesses in the UK.
Could actually that be good for the UK? But also, you have to remember, could that be good for those future pensioners? So, what we have is, you know, this situation where DC pension savers today will not have the benefit of final salary pension schemes and therefore they have to have enough money to be able to retire well. If we carry on as we are today, they will not have enough money to do that.
So, we have to get this balance right. And what Aviva is really keen to do is to present the customers with the opportunity to make that decision themselves and basically to have a little bit more financial education about the situation they may find themselves in 30 or 40 years down the line.
Now I take your point on picking up on the detail there, absolutely spot on Amanda as ever, I guess your balance sheet as a derivative of those pension contributions. Look, but my worry is, again, the same point. Just like LDI was a genius product until it wasn't. Isn't the idea of investing in a lot of these companies, albeit over a multi-decade period, is the scrutiny on the private sector, I would suggest, and maybe you're going to correct me on this one, and you're very welcome to, isn't anywhere near as much as it is on the public sector.
So you are absolutely right. And that is why if you are going to invest, you know, 5% of your 100% into that private sector, you have to have that done by a fund manager and in a fund that actually has the expertise and capability to be able to do that. Now, clearly, we have that. We have Aviva Investors that does that.
But that means that those people deciding on where they put their pension, you cannot be focused on cost alone. You have to look at the performance of that fund over time. So, you have to have the expertise to invest in infrastructure, in real assets, and also in private equity. Then you need to make sure that you have people that really, really understand that. It isn't something you can just go into, you know, and in 2 to 3 years’ time think, oh, this is not really working out.
You have to have a long-term solution for it.
Can we talk about the market conditions too, around wealth? We've obviously got bonds back in focus at this point. Cash is king for some investors, at least short term, challenging the equities story. So when it comes to your wealth business, challenging market conditions, you point out net flows, there were ¬£4.3 billion. So can you just give us a sense as to how you see that landscape at this stage?
Yeah. So I think, you know, if we think about the workplace business, which is a significant portion of our wealth business, we actually achieved over 100 billion of assets under administration in this half, which is a significant achievement. And we are seeing that through more DC, more defined contribution pension wins, so 211 in the in the first half of this year and also wage inflation, so you know people's salaries going up and therefore their pension contributions going up.
But you know, if we look at the other side of the house on our adviser platform, whilst we were sort of second in the market in terms of performance in this first half, we are seeing that customers are making the decisions around how they allocate their money. Do they put it into funds, or do they keep it in cash?
Now, clearly, for our customers, if they keep it in cash on the platform whilst they make that decision, we pass all the benefits of that back to them. So, we are not taking any of that interest benefit. We pay approximately four and a half percent back to those customers. Whilst they may make the decisions, they might keep their money in cash whilst they’re looking at the market conditions and deciding what to do.
Amanda, can we just turn focus to the protection of the health cells? Also, a bounce here up 23%. There's been some griping about the NHS again about whether you should have private health insurance at this stage. What are you seeing in the sector, also on the back of the wash up from COVID at this stage? What are those factors doing in terms of the health numbers?
Yeah, so 58% growth in our health insurance business and that is across direct SMEs and global corporates. So everybody is thinking, you know, health is on everybody's mind. So what are they concerned about? You know, they’re concerned that if when they need a hip operation or a knee replacement, that they're not going to have to wait long periods of time.
And obviously having health insurance gives them real peace of mind. What you're seeing is employers thinking about how can they help their workforce, even with things like access to digital GP because obviously people are having to wait for doctor's appointments. So really very buoyant as far as the private health insurers is concerned. So, all of those concerns around waiting times in the NHS coming through into our health insurance numbers for sure.
And on individual protection, we also saw some really strong growth there in the last half. So, people are definitely thinking about how can they ensure that they protect themselves in difficult situations.
Amanda, just very quickly, any thoughts to on Wegovy and obesity drugs like that, whether you should be offering protection for some of those medications, given that can reduce heart disease, cardiovascular disease, according to latest studies.
Well look, anything that improves mortality is obviously fantastic for the UK population and for the populations worldwide. And some of these new drugs are clearly developing and actually developing very, very quickly. You know, so what you're seeing in our mortality numbers is obviously mortality has sort of increased post COVID. But what we now need to do is to have a look at those drugs and the benefits of those over a very, very long period of time.
Clearly, what you're going to see is that is going to take time to come through. So, I think we're watching that sector very, very carefully. Our actuaries are all over those numbers, as you would expect. And we're looking with interest to see what the developments there are going to be.
Amanda, we've been very cheeky about time, that’s taken us to 11 minutes. So, thank you so much indeed. We know you're very busy today. What a shame we didn't even have a chance to talk about the rugby from Saturday. But we'll do that another day!
Are we going to talk about the Saturday before?
Yeah, well, we weren’t so good. We were very lucky, and only in the second half we turned up. Amanda, lovely to speak to you and hope to see you again soon.
Although strenuous efforts are made to ensure the accuracy of interview transcripts, Executive Interviews and its associated companies accept no liability for what is said, for any discrepancy between the spoken and written word, or for any errors and omissions. Where doubt arises, please refer to the original broadcast video interview.
10 June 2023: download Amanda's interview with The Times.
20 December 2022: read Amanda’s interview with The Daily Mail.
27 October 2021: read Amanda's comment on the budget in The Telegraph.
17 October 2021: read what Amanda has to say about Aviva’s increased investment in green assets and how we are using our influence to call for change and push for progress in the move to net zero, on the This is Money website.
20 December 2020: read Amanda's interview with The Sunday Times (subscription required).
5 November 2020: read Amanda's views on lockdown and what is required from business to support its people and customers, first published in The Times.