Brand recognition has been a marathon, not a sprint, for Aviva

UNLIKE many Scots, David McMillan freely admits to being excited about the Olympics. The chief executive of Aviva’s UK and Irish general insurance business has tickets for events including athletics, swimming and beach volleyball.

Then again, McMillan does have a vested interest in watching Great Britain’s runners crossing the line in first place at the London Games this summer.

“We’ve been sponsoring UK athletics for the past ten years, so it will be good to see a return on our money,” he smiles, fending off the suggestion that the infamous beach volleyball tournament – complete with tanned athletic bodies jumping up and down – could be a more enjoyable event to watch.

Aviva’s sponsorship of British athletics – including last week’s Olympic trials event in Birmingham – has been just one in a number of campaigns that the insurer has run in recent years to build up name recognition, having dumped its previous Norwich Union brand in June 2009.

Love or hate them, the TV adverts featuring comedian Paul Whitehouse have probably been the most recognisable change. Despite Whitehouse’s Scottish accent coming in for criticism, the commercials seem to have done the trick for the insurer.

McMillan says: “In the run-up to the launch of the Aviva brand, only 5 per cent of the public recognised the name, mainly because it was used in some overseas markets and was the name of the holding company.

“Last year, brand recognition was above 50 per cent and we passed Direct Line as the most-recognised insurance brand.”

Aviva has also received a boost from its sponsorship of Norwich City football club, with McMillan saying the insurer’s brand has benefited from the side retaining its place in the English Premier League last season.

When the rebrand was announced, public relations in the firm’s spiritual home in East Anglia were just as important as the national strategy to spread the word. Yet it’s the company’s other historic base – in the fair city of Perth – that is often at the forefront of McMillan’s mind. Despite living in Edinburgh, McMillan’s job takes him all around the country, from Aviva’s head office in London to its bases in Norwich and York.

Last week, he was in Bristol for a meal to mark the retirement of Lord Sharman, the company’s chairman, who is being replaced by former Royal Bank of Scotland director John McFarlane.

As head of Aviva’s general insurance business, Perth is at the heart of McMillan’s empire. Originally the head office of General Accident – which merged with Commercial Union in 1998 to form Commercial & General Union, before being taken over by Norwich Union in 2000 – the firm’s operations in the city now consist of about 1,400 staff, dwarfing the 800 at General Accident’s peak. Aviva has a further 900 people at Bishopbriggs and about 200 staff spread across other offices in Scotland, including Aberdeen and Edinburgh.

McMillan wants to see the total headcount in Perth rise to about 1,700 staff by winning more work from existing clients, such as banking giants Barclays, HSBC and Santander.

“We’ve got spare capacity in Perth and I want to fill it,” McMillan says. “The timescale will depend on how quickly we win new business. We’re proud to be a big employer in Scotland.”

McMillan said he had seen no effect on the number of insurance policies being sold under the Santander brand after Spain was enveloped in the maelstrom of the eurozone debt crisis, despite some local authorities shifting deposits from the bank.

Also at the front of insurers’ minds at the moment are the Solvency II regulations being introduced by the European Commission, requiring insurance firms to hold more capital in reserve and harmonise risk management standards across the European Union.

McMillan reiterates that Aviva’s broad base across both general and life insurance markets means it is well placed to cope with these requirements, but he is keen to reinforce the need for sensible regulation.

“Insurance companies aren’t the same as banks and don’t carry the same kind of risks,” he says. “It’s important the UK government recognises that it can’t treat all companies in the financial services sector just the same.”

Governance has been another hot topic in recent times and Aviva has found itself at the heart of the storm during this year’s “shareholder spring”.

Andrew Moss, who had been chief executive at the company since 2007, announced his immediate departure after more than half of shareholder votes failed to back the firm’s remuneration report at the AGM.

Before the annual general meeting, Moss had offered to waive his near-5 per cent pay rise, which would have taken his annual salary over the £1 million mark. But such a gesture was not enough to appease investors, who have been hit by a 30 per cent drop in the company’s share price in the past year.

McMillan has been touted as a possible replacement for Moss, with fellow Scot David Barral – chief executive of Aviva’s UK and Irish life insurance business – also said to be in the running.

Former Standard Life UK chief executive Trevor Matthews – who was promoted to his current role as Aviva’s executive director for developed markets during a management reshuffle in April that saw Barral and Moss take up their present posts – is another potential contender to take over the helm.

Leading the search is McFarlane, who was appointed as executive deputy chairman when Moss resigned and who will become executive chairman next month when Lord Sharman hangs up his hat. McFarlane is best known for the ten years he spent at Australia & New Zealand Banking Group, turning it into what has been called one of the best-run banks in the world.

For his part, McMillan remains tight-lipped on his chances of taking the top job at Aviva.

“No comment,” he says diplomatically, adding: “I’m quite relaxed about the whole process, as long as we get someone who is up to the job.”