In the run up to Article 50 being triggered, Aviva's Mark Wilson reflects on the opportunities that Brexit may offer.
Published in the Evening Standard, 2 March 2017
I argued that we should remain in Europe. Now it’s time to deal with the facts as they stand. And the fact is with Britain about to pull the Article 50 trigger, we need a hefty dose of Brealism to take advantage of the opportunities ahead.
As a Kiwi with British roots, I have no personal axe to grind, but New Zealand’s experience can shed light on the choices facing this country. And as Chief Executive of Aviva, UK’s largest insurer with a substantial international business, I can see Brexit presenting global trading opportunities for the UK.
The current debate is disfigured by absolutist positions. Nearly 30 years of business experience around the world has taught me that the most pessimistic, or the most optimistic, analysis rarely comes to pass. Will London retain a leading role in the global financial system? Of course. Will there be changes to the way we work? Yes. Will the negotiation be complex? No doubt. Will the UK’s businesses, large and small, find ways to flourish thanks to the country’s unique strategic advantages? They certainly can.
So let’s be realistic about where we are. There’s no denying the vote to leave the EU. Equally there is no denying the enormity of the task facing the Prime Minister and government. The hardest negotiations in a generation will take place over and above a domestic policy agenda that will not- and should not- stand still. Responding to the needs of an ageing society, building the digital skills needed so the UK can thrive as a fintech hub and accelerating our efforts to tackle the dangers of climate change, to name but three.
Nonetheless if we guard against the twin evils of undue pessimism and wishful thinking, we can get this right. While the operational impact of Brexit on Aviva is minimal, like all businesses we dislike uncertainty. So we are focusing on the practical considerations of what is to come and the opportunities that will be created.
My starting point is a simple recognition that we all need this to work. And for Brexit to work, we need to work together. It’s time for the country as a whole to get proudly behind its businesses big and small. Everyone should recognize and celebrate the jobs these companies create and the value they bring to our communities. Buoyed by that confident support, the government, our regulators, our industries can do so much to promote the UK as a world class place to do business.
Just look at how much we have to work with. It’s too easy to take for granted what has grown familiar. This nation invented the language of business and the world’s reference time zone, GMT. British success is anchored in its open outlook, cultural diversity and global connections. Nowhere is this more evident than in the great city of London - one of the planet’s few truly international cities and a hub for insurance, banking and law, which are just three of the many sectors where this city excels.
I saw for myself from working in Asia just how highly regarded the UK is for quality, integrity and reliability. These qualities cannot easily be measured but they really do matter. They underpin long standing strategic relationships that span the globe and add to the UK’s soft power. They open doors and make it easier to export this country’s products and services in a way that should not be discounted. Simply put, brand Britain is an extraordinary competitive advantage.
If Britain had no heritage as a great trading nation then Brexit may well be posing an existential threat. But that is simply not the case. However, to make the most of Brexit we need to peel back layers of needless bureaucracy and excessive regulation so our essential strengths can shine. After all, this is one of the reasons people voted for Brexit in the first place. Let’s use this space to look again at, for example, rules that hold back how much insurers can invest in infrastructure like renewable energy, schools and hospitals.
And let’s embrace the potential of deals with the US, with China and beyond. We are currently witnessing a moratorium on multilateralism. The future is bilateral, not bloc. So let’s focus instead on bilateral relationships. And that means needing the EU to succeed too. The UK should continue its strong ties and keep trading with the EU. Ultimately this is not a debate about the UK, the EU or any of our potential trading partners alone. Brexit needs to work for all of us.
My homeland learnt how not to do things when Britain joined the European Economic Community in the 1970s and New Zealand was locked out of its traditional market. First it tried tariffs to protect its industry and subsidies to support its farmers. Guess what? It failed. Then it tried unrestrained spending. Guess what? That failed too.
It was only when the counter-productive regulations and barriers to trade and innovation were swept away that New Zealand found its way to prosperity again. It also had the foresight to recognise early the significant role of China, leading to New Zealand being the first developed economy to sign a Free Trade Agreement with China.
After a few false starts, New Zealand’s success ultimately depended on having the right mind-set. They chose not to be constrained by the status quo. Instead they took the bold course. They had the vision to set their sights not only on the opportunities in front of them but also those that were still to come, decades down the line.
My company has been around for 320 years and insurers are used to thinking in the long term. As long term investors we are all about seeing the potential beyond short term political and economic upheavals. The sound and the fury of the coming months will no doubt be fierce. But the possibilities are palpable too.
Mark Wilson, Chief Executive Officer, Aviva plc