Jonathan Swift asks whether RSA promoting Scott Egan is a sign of the insurance industry's lack of appeal to external candidates; a sign of lack of big name insurance draws in the market; an indication of its risk aversion; or a combination of any of the three.
This week RSA announced the departure of its UK and international boss Steve Lewis, to be replaced by the group CFO Scott Egan, pictured.
Aviva is reportedly close to announcing a new group CEO with Andy Briggs, chief executive of the firm’s UK insurance division, and Maurice Tulloch, CEO of international insurance the two names in the frame.
I have nothing against Egan, Briggs and Tulloch, but I would posit that these are not exactly ‘eye-catching’ appointments at a time when both companies could do with a bit of good news. Not least for investors.
Aviva’s share price is down 70 pence from 12 months ago to 418 pence.
RSA last year announced it had withdrawn from three of its London market business lines as part of a restructure of its specialty and wholesale business, following an earlier profits warning.
At least RSA moved quickly to announce a successor to Lewis, by immediately passing on the UK and international reins to Egan.
It is now almost four months since Mark Wilson stepped down, and one wonders what is taking Aviva so long if they have decided to look internally for a replacement. And if they did look/ are looking outside, how widespread that search was/is?
RSA’s move and Aviva’s purported shortlist tap very much into a trend in the market at the moment, as evidenced by Axa going internal to succeed Amanda Blanc as its UK and Ireland boss last year with Claudio Gienal.
Of course it is not always easy finding a new ‘external’ CEO. Ask Esure.
Darren Ogden is still listed as interim CEO, 13 months after Stuart Vann departed. Things might have been held up here by the Bain Capital takeover. But given Ogden himself admitted they were looking for “a new type of leader” who was “likely be an external candidate [with] digital experience” shows that it is not always easy to make an eye-catching move.
Interestingly Langan joined the insurer in October 2005 with the likes of Coca Cola and Diageo on his CV, in a move that was certainly eye catching at the time. Especially as it ended a 19 months search to find a successor for Sian Fisher. This time with Thaker, Hiscox looked internally for a move that might make total business sense, but lacked the ‘fizz’ of the previous appointment - and took a third of the time.
Which leads us to Direct Line.
The business is currently searching for a successor for Paul Geddes, who announced his intention to step down in August 2018. One suspects we might get a grand unveiling when they announce their results on March 5.
The big question, is will they follow the likes of RSA, Axa and Hiscox and look internally; as they did when Geddes moved from former parent Royal Bank of Scotland to run the business; or try and make a splash with an external hire from a sector perhaps considered ‘sexier’ and prove the market still has some recruitment pull.
Of course sexy does not always trigger a turnaround in results. And so maybe looking for an insurance outsider with the likes of Amazon or Google on their CV is at best foolhardy, and worst a car crash waiting to happen.
Manchester United are a team reborn under the - once considered underwhelming - hire of its former striker Ole Gunnar Solksjaer. Perhaps there is something said for looking to someone with a knowledge of the business.
Or is it a case, with Blanc already accounted for by Zurich, that there is simply a lack of big name ‘clout’ out there in terms of ‘rival’ insurance appointments; and so that it is better to stick with what you know, than poach someone from a rival?
It might not be ‘eye-catching’; but it’s not risky.
And that is either damning the sector with faint praise, or a complement for a sector that prides itself on managing exactly that - risk, depending on your point of view.
A fantastic effort from 4 of our Cambridge office team who participated in a skydive at the weekend for UK charity partner @RainbowTrustCC #Welldone to Elise Hackney, Caitlin Shevlin, Uzma Malik & Marwan Alnoor #kennedysCSR #makeadifference pic.twitter.com/rNq0QbLD0q— Kennedys (@KennedysLaw) June 26, 2019
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