14 June 2016 Insurance

Aviva CEO warns of challenges ahead

The insurance industry faces challenges from a changing world, according to Colm Holmes, chief executive officer of insurer Aviva.

Speaking at the annual run-off congress run by the Insurance and Reinsurance Legacy Association (IRLA) Holmes warned that disruption was not coming to the market - it had in fact arrived in the form of changes to technology and data, climate change, the economic environment, conduct and regulation and shareholder expectations.

“There is opportunity and risk ahead,” Holmes told the conference, adding that customers wanted clarity and simplicity from insurers at the moment, creating a need for a more transparent market. “The world is changing - customers want to interact.”

He also stressed that shareholders were also changing, as more sustainability and less volatility was being sought by investors.

Holmes told the IRLA congress that the past year had been a time of retrenchment for Aviva, with it transferring £0.7 billion in new exposures to Swiss Re and its UK Life businesses selling £2.2 billion in non-core commercial mortgage business.

Looking ahead Holmes said that the markets would remain turbulent, that insurers needed to build new relationships with regulators and that there had to be a focus on insurance fundamentals.

“We need to be lean and agile,” he said. “And we need less long-tail risk. So we need more transactions in the future.”

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