Aviva CEO Mark Wilson speaks at the 2016 Marketing Society Conference

Aviva CEO Mark Wilson speaks at the 2016 Marketing Society Conference


Great to be here this morning. When I was
coming here this morning was with a colleague in the car and he said to me,
he said, so you’re talking to those marketeers this morning. And I must
confess, now admittedly I went through University a few years ago. But when I
went to university there was no such thing as a marketeer in its own right.
It always had a description in front of it. You might have been a free marketeer
or black marketeer or there was the guys that followed their bloke with the big
ears a Mouseketeer yeah. But there was never a marketeer, it was always about
marketing and the marketer. And I must confess in some of the
industries in the UK, I think not a lot has changed because I think in a lot of
industries in the UK particularly in financial industries, still not a lot of
what I think of as real marketing exists. Now I could stand here today and say
everything in the marketing garden is rosy, but I really don’t believe that’s
the case. Because the skills that we needed in different stages of some
global economic development and marketing have changed, as we’ve just
heard from Facebook. And I also believe that the skills that the UK in
particularly will need, and I know we’ve got friends beaming in particularly from
Asia and Hong Kong and Singapore and I spent 14 years in that region some I’m a
very big fan of that region. But as the UK goes through the Brexit scenario as well the
marketing skills we are going to need are different. And I think as a country
maybe we’ve forgotten some of them. Now and therein I guess lies the
opportunity. Now as I going to introduce you said I’ll do turnarounds. That’s what
I do. I mean my favorite thing in the world is to take big broken companies
that are big brands and fix them and transform their business model. That’s
what I do, that’s that’s my passion in life and I have been at Aviva now
4 years and we’ve made some progress. But Aviva of course, I guess Facebook has
been I think he said 12 years? Well Aviva started on the 12th of November so
was that last week? 1696. 1696 that’s 320 years ago and it
started about half a mile from here in a little coffee shop that is
now Charing Cross station. And it started just a few years after the Big Apple and
i don’t mean the thing that iPads and iPhones, that started a little bit later.
I’m talking about after the Apple dropped on this blokes head, his name was
Isaac Newton he was one of our first customers by the way. And dropped on his
head and he started to articulate some of the fundamental laws of the universe.
Well I’ve got to say that Aviva has been around since that time and I think we’ve
forgotten some of the fundamental laws of business. And despite the fact that
digital has changed the way we do business and distribute business and
think about business, the fundamental laws for successful business have not
changed. And we became a company that I guess focused on very much the
distributor, not the consumer. A company that for some reason thought that
marketing was about the fluffy stuff, you know about advertising and sponsorship and
name awareness. And really it’s not. And I’ll come back to that because I come
from a pure marketing background. The true essence of marketing. Marketing is
about customer proposition. Marketing is about financial analysis. Marketing is
about fundamental strategy. It’s about data, it’s about pricing. That’s actually
what marketing is at it’s very core. And I believe business is a very simple
thing. And often we make it too complex. It’s only about strategy, it’s only
about execution and it’s only about values. Nothing else really really
matters. Now we have a clear strategy. I think one of the reasons we got into
problems is that we didn’t. I just said we got our staff engagement we call it
Voice of Aviva, just got the survey back 3 days ago and it told us that
83% of our people understand, believe are imported the
strategy. Now that’s actually the highest number in the entire FTSE. Now that
surprised me, I don’t mean financial services. I mean for FTSE. And we’ve also
got very clear values now and we just spoke about values a few minutes ago, but
but i’m there. Now values aren’t what most companies put up on the wall. It’s not
honesty, integrity, get me a bucket. Those are weasel words. They really are. How
many of you got that in your company’s? If you have, they are wrong. Because they are
hygiene factors, of course you need honesty, of course you need integrity. I’m
not going to put them on a perspex thing in the lobby, that’s not what it’s about.
Our values, we’ve only got 4, and they’re the values that matter for us. And the first
one of those is Create Legacy, or as I call it being a good ancestor, thinking
long term and with 320 years a history we had to do that. It’s
about Killing Complexity because my industry is just still way too complex.
It’s about Never Rest, about which means always be unsatisfied with the
status quo, always be looking to improve, always looking to disrupt. And the last
one is really simple it’s about Care More for customers, staff, society, economies, the communities in which we live. Just do the right thing. Not do what
the regulators ask you. They often do the wrong thing. Just do the right thing. And
to me if you base your decisions on your values, you can’t get into trouble. You
know the financial, where we have got to, well the financials are
obviously a whole lot better, the stock price is well up, the capitals, you know
well I think we’ve added about 15 billion of capital in the last 4
years. The profits are up. But all that’s very well and we’re growing again and
our customer base has been growing extraordinarily strongly this year.
But you know those are some of the measures.Business just cannot survive on
financial profit alone. And if there’s no business in the history of business that’s
ever survived long term with an objective of making profit. You must have
a social purpose, you must have a reason for being something that makes people’s
lives better. Now some marketers are all marketeers if you wish, call that a value
proposition, I think that’s a little bit simplistic. So what’s ours? Well in our
industry stuff wouldn’t happen, that’s why I guess we’ve been around for so
long. Stuff wouldn’t happen if we didn’t exist. You wouldn’t be sitting in this
room if it wasn’t insured, you wouldn’t have your house, you wouldn’t be driving
a car, you wouldn’t be flying the plane, you wouldn’t be retiring for most of us. So
we’re there really there is an industry to help people when bad stuff happens. We
call it Defy Uncertainty. We help people to defy uncertainty, then get on with
their lives, defy uncertainty. My digital team call it ‘hack fate’. Can tell it’s a
pretty cool term. Now we’ve had a bit of evidence of this this week it may not
surprise you to know I’m not from around these parts. I’m from exactly 18,537.2
kilometres from here. Any guesses? New Zealand, you’re good.
I’ve been away for a long time but there was a quite a major earthquake there
this week. And probably about three billion pounds with the damage given that
sort of magnitude. And it wasn’t even that big. But still big enough. Now they
will recover and the economy’s been doing pretty well, but they wouldn’t recover
without companies like us. So we’re we’re there for that purpose, how people
defy uncertainty, and that’s why I guess we’re still here. The things we insure
might change from horses and carts years ago, or houses, now it will be autonomous
cars and so on. But the the need is still there. Now but my biggest frustration
with marketers as people, I find a lot, particularly in the I guess Western
world an,d particularly in Europe have got away from being able to
articulate what why they will win, what their competitive advantages. What’s
important to the consumers? What’s their differentiation? We’ve really got away
from that. I call it the proposition tweet. So for every one of our products
and every one of our countries, I’ve asked all our people, for every one of the
products, to do a proposition tweet. And if they can’t explain in 140 characters or
less, why, where and when and what their proposition is for their customer, I’m
going to kill their product. Because if you can’t, why would we invest? And that’s
something that I think the tech companies and particular companies in
the valley of the US have really taught us all, the simplicity of what they offer
customers. I can give you something makes us different at the moment, I will talk
about a digital proposition because you know unlike most industries, I think the
insurance industry and the financial services industry, and the fund management
industry. Remember we manage yeah but under 400 billion pounds as well. These
industries I think are in the stone age. We just saw Ed the astronaut, Ed the
astronaut. He’s been circling the world in a spaceship where insurance and
financial services is in the stone age. I think we’ve just invented the stone
wheel when it comes to digital. But the positioning of Aviva is we are making
Aviva a 320 year old disruptor. I realized a while ago you don’t have to be 12
years old to disrupt. It all depends how you disrupt. And you know if you go
through the history of the world, and we all know the phases that mankind’s been
through. We had the agricultural revolution where we turned from
hunter-gatherers to farmers and that created the food chain as we know it.
That’s in a bit of trouble at the moment, that’s another speech and another
day. The second of course was the industrial revolution that scarred the
world with all the soot from all the coal fires and chimneys and really cause us
problems. All these revolutions do cause us problems at some stage. The third of
course was the Services revolution really where a lot of the insurance
industry was born. The problem with the services revolution is that it put corporations like us at the
top. And it put salespeople at the top and the consumer somehow was forgotten
about. And then the digital revolution may be one of the most profound of all
that finally got it right by putting the customer in control, and it seems
incredible that it has taken us that long to get there. So why can we make Aviva
a disrupter? Well you know I was talking to someone in Silicon Valley, one
of the great VC people and this is a couple of years ago and he gave me what
I call a BFO, a blinding flash of the obvious. He said and I said, I hear this guy’s been incredibly successful and I said you know what what should we be
doing? He said you don’t realize Mark you have got two key advantages that any
startup would die for. So what are they? And he said well first of all you got a
brand and our brand is phenomenally powerful. In lots of countries around
the world, even China for what it’s worth. And secondly you have got 33 million
customers and a huge amount of capital and assets. And when you take those two
together you’ve got something that works in digital space. And so we took that
away and we said, ohfantastic then we can’t fail. So we put about 100 million
pounds into it, we hired all these people. We had the perfect strategy, we had it in
our existing business, and then after 12 months we had achieved
precisely nothing. Nothing except we spend 100 million pounds. Nothing. No
innovation, no product, no new customers nothing really disruptive at all. And
then I had another BFO, I realized we’d done it all wrong. We had to build
it on a business that old we had to build it outside the company. So we
bought some things in Hoxton Square that we own about half of Hoxton Square now.
And I realized I needed less actuaries and not much less insurance people.
I needed data scientists and innovators and entrepreneurs and startup magicians
and marketeers or marketers and customer proposition people. And people who could
actually look from outside the industry. And then it exploded. We created a
separate business you know after 12 months the first 6 months of this year,
not the profit is necessarily the measure this early but we made a hundred
eleven million pounds from a little startup in six months in Hoxton Square.
We have 4 million customers on our platform and now we’ve gone and I’ve
given them a very simple strategy. The strategy is compete and cannibalize. I
want them to kill the rest of my business. Compete and cannibalize and
indeed they are doing precisely that. We went from an industry that asks hundreds
of thousands of questions to a business that asks none. It’s all Big Data. We
haven’t rolled it all out yet but you’ll see it soon. We’ve now got a
proposition we will ask no questions at all. It’s all Big Data. Questioned if
we’re insuring your house, for example like, how BIG’s your house, I can get that.
What’s it made out of? I get that from council records. What are the trees in
your neighborhood? Because trees drop leaves on the ground, they block drains.
Drains cause floods. We can get that too. I know the types of pipes you have in
your house, because some pipes degrade quickly with UV light. They’ll spring a
leak, cause flood. I need to know that stuff. I even know whether you use your
phone in your car to do text. That’s bad. That’s really bad. Now all of this stuff
helps us also predict events and floods and we give our customers predictive
advice because that’s really the business we’re moving into. But when you
put all that together and you do it to our you know 30 odd million customers we
can now produce these products, just about all of our products, at 30% less than what we could before and what
the rest of the market can.And that ladies and gentlemen is a one hell of a
competitive advantage. So what about Brand? Well Mr. Whitehouse all those TV ads
in the UK have been shall we say what would retired. Those ads meant that we
were product pushing and motor insurance and that’s only about 3% of our earnings. We’ve gone from a company that spends 80% of its budget
on TV two years ago, to more far more than 50 on social and digital media. And
it’s really a fundamental change in what we’re doing as a business. We’re engaging
clients in a different way and what we’re really doing is turning Aviva into
a giant fintech. That’s what we’re trying to do with the business and it is
not as hard as you may think. As long as you separate the business out. I disagree
with a lot of views around the world that say you have to have it right through
your business. I think in some of the old industries you got to pull it out and
make it different and actually run it as a start-up. And I’ll just conclude by
saying this. You know I was fascinated when I read the title of this conference.
3.57 Digital at our Core. And and we’re all much closer to one another, I think
that’s true enough. But for me it really misses the fundamental point because
being closer to everyone doesn’t mean you connect with them. You know many of you
this morning would have come in the jam-packed tubes, but that’s and that’s
like saying for example that everyone on the Northern Line is your family just
because you were close. I think that’s a pretty scary sweaty prospect. And I think
the difference I’m talking about between proximity and closeness. And there is a
difference. And what matters is really how you do it. And how you do it matters
on your social purpose that I spoke about before. So we’re here to hack fate
and defy uncertainty. And I think ladies and gentlemen
whether you’re 12 years old or whether you’re 320 years old as
we were last week, I think you can have unbelievable relevance and resonance in
this digital world. And for people like you and people like me, ladies and
gentlemen, I think that’s an unbelievably exciting prospect. On that note I thank
you.

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