HIGHLIGHTS: Dame Amanda Blanc - CEO of Aviva

0:01Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi everybody, I'm Nikolaj Tengen, the CEO of the Norwegian So-and-Wealth Fund, and today we are in really good company with Amanda Blank, the CEO of Britain's leading insurance company, Aviva. Now, this is the kind of company that insures your home, your car, and helps you save for retirement. They serve 25 million people globally, and 21 million people in the UK alone. Amanda took over in July 2020 and has led what is described as a complete transformation, and we're going to hear all about it.

0:41So, Amanda, wonderful to have you on the podcast. Now, thanks, Nicolai. Really, really great to see you. Just briefly before we start, what does Aviva actually do in short? Oh, right, in short. Well, I mean, basically, it protects people, it protects businesses from bad things that can happen. and also it looks after people in their hour of need and when they want to do things like retire. So, you know, we say with you today for a better tomorrow, that's our purpose. And I suppose that encapsulates everything that we do. Now, you're both an insurer and a major investor. How can you explain that dual role?

1:19Yes. So obviously, as an insurer, we have a big balance sheet, so over 400 billion pounds. And so we need to put those assets to really, really good use. And we do that by investing. We're a big investor in the UK. So, you know, we're a big believer in the UK. So we invest in UK infrastructure and UK gilts. I mean, also in private assets. But we also invest in corporate debt and in other things. So I think it's about getting the best return over a very long period for our shareholders and obviously also for our customers. Now, you and I, we've been in the jobs for pretty much exactly the same time, five years.

1:56Now, you've totally transformed Aviva. What are the key decisions that you have made? So I think the key decisions came with actually within the first month. So I was in a fortunate position of being on the board for six months before I became the CEO. And really, the big decision was around focusing the portfolio. If I looked at Aviva and, you know, we had positions all across the world, but we didn't have scale positions. And coming from the background of working at AXA for much of my career, working with Henri Descartes, you know, one of his big mantras was, You need to be top three in the market that you're in, in order to be able to influence and to get the benefits of scale in that market.

2:32So we took decisions very early on about focusing the portfolio. We sold eight businesses for eight billion pounds within the first sort of 12 to 24 months. And by doing that, we were able to meet our second objective, which is about delevering the organization, also returning some money to shareholders. And actually, what was good was by selling off those businesses where we didn't have scale positions, we basically showed the strength of the core business in the UK, Ireland and Canada. And all, you know, all the real benefits of being scale players in our market really started to shine through.

3:06How do you get people to save more for retirement? Well, I think there's a number of things. I think, first of all, understanding in schools that people need to understand that, you know, today, if you are going to retire, you're not going to have a defined benefit pension. You're only going to have a defined contribution pension. And in the UK, 15 million people will not be able to retire well. So I think getting that education, it needs to start young. And then I think it needs to carry on through their working life. I think the government can help with that, Nicolai. If I think about, you know, things like auto-enrolment age, bring the age down from 22 to 18, where you start saving, and increase the contribution from what it is today at 8 % to 12%.

3:47These are things that we know will make a difference. So I think it's a combination of taking individual responsibility. Employers can help with education. Definitely, you know, the government can help with policy. So I think it's a combination of all of those things. And then I think encouraging investors to think about not just sort of taking the default pension fund and just investing in the safest assets, but thinking about investing in things like private assets that over the longer term will give a better return. Moving on to some of the changes we're seeing just now, how is AI changing the insurance business?

4:21Oh my gosh, massively. I mean, if I think about Aviva, you know, we've got about 150 use cases on AI. I mean, look, we are very big users of AI. So if we think about our motor pricing, we've been using AI for over 10 years, machine learning, and like 98 % of our retail products are priced using AI. So for instance, if I'm 18 years old and I buy a new Ferrari, I pay a high price, right? Yeah, I mean, you probably would struggle to ensure that. I think an 18-year-old driving a Ferrari, I mean, is that really responsible? I don't know, you know. But yeah, I mean, we've been using all of data and machine learning for a very, very long time.

5:04If you think about how competitive and dynamic the UK market is, everybody's sort of constantly using different models to get to your best pricing point. But if I think about some of the more exciting things, you know, in our claims world, for example, previously a customer would have been on calling us to check where a claim is in the process. They'd have got through to a handler. A handler would have taken details from them, looked through all the screens of all the different systems. Today, we've basically used AI models to predict the likely reason why the customer is calling so that when the customer gets through on the call, they're basically speaking to a handler who can say, I can see where you are in the claims process.

5:45They've done all the fraud checks using AI models, and they can basically help the customer with the claim rather than spending the first five, 10 minutes of the call taking all of the details. So I think that that use case can apply to very many products. And so that combination, I think insurance is perfectly set to take real advantage of AI. Moving on to leadership. What is good leadership to you? Well, first of all, I think listening as much as talking, being able to communicate really well, quick and decisive decision making. but really importantly good follow-through on that decision making.

6:28And what's the best way to follow through? Because you have been, some people call you the execution queen. What does good follow-up and good execution imply? How do you get there? So many times you see, I don't know about you, you must see it all the time. You hear leadership presentations and you hear strategies and people say, I've got this great strategy. and you look at the slides and you think oh yeah that sounds really really good and then you know you sort of look back five years later and go I wonder what happened with that you know and and I think strategy is great execution is better so you know I think you can if you execute well on a sort of 80 % their strategy you would probably do better than you have you have 100 % brilliant strategy and don't follow through on the execution what does it mean it means you know having very clear objectives for absolutely everybody in the business from me to the you know to every single person in the contact center so that there's a real flow through just can everybody connect with what the the principle and focus objectives of the business are regular monitoring of the performance so you know with my cfo charlotte jones i mean she's phenomenal you know we have great performance management meetings with the business regular reviews are you doing what you said you were going to do if not why what has changed what do we need to do differently to get to a better outcome some um personal reflections you are one of the ceos who are the most vocal about gender balance why is that important for you well i mean i mean so first of all i would say i was asked by the government to be the women in finance champion in 2020 and and we are we are part we are part of them moving in nowhere, by the way.

8:15Now, as far as the women in finance was concerned, what was clear was that, you know, there was a problem, there is a problem with women in financial services in the UK, which the government actually recognised about 10 years ago and set up the Women in Finance Charter. And then, you know, obviously, they have been trying to improve the number of women in financial services roles, because the belief is, was that by having more diversity around the table, you ultimately get better decisions. Now, I think about that in diversity in its broadest form, but certainly, you know, it will also apply to gender.

8:51And so, we've been working really, really hard with the government, with other financial services firms to broaden the accessibility of insurance, of banking, of investment banking to women. And it is by broadening that accessibility, I think that we can bring a more diverse workforce in. Partly because of this work, you were appointed a dame in January 24. What, and for the listeners who don't know, it's kind of the equivalent of being knighted, right? That's right. For women. That's right, yes. And it's a huge thing, right? Yes. In the English society. What did it mean for you personally? um well first of all you know i i was born in the rhonda valley in south wales in the uk my both of my grandparents were minors i went to a comprehensive school and i started at commercial union as a graduate trainee not knowing even really what insurance was or thinking about it so to end up with a damehood um which actually was for contributions to business for contributions to climate and for contributions to gender for those those three things I mean it meant the world to me obviously it was a really it was a really phenomenal um day for me and my family and you know my mom and my my you know my dad had passed away at that point and I just know he would have been so proud of that um but to just think that you can come from where I came from um you know to to that was it was just amazing Thank you.