AVIVA CHIEF'S FINAL BOW

Philip Scott's career has been defined by financial crises.

From deciding to join the then Norwich Union more than 35 years ago to being responsible for steering Aviva through the recent financial turmoil, global crises have played a major part in his life.

The outgoing Aviva finance chief has held a string of senior positions at the insurer over the years, but it all started pretty much by accident - and it was never meant to last more than a few months.

Born in 1954, Mr Scott moved to Norfolk with his family in the 1960s and settled in Reedham, where his father bought a business. Although he then left for London to study engineering, he returned to Norfolk when tragedy struck and his father died of a stroke.

After the business was sold, Mr Scott went job-hunting, and he ended up being offered temporary placements at two of the region's most iconic employers.

“I was offered jobs at Norwich Union and Lotus Cars, and it was one of those big decisions for me,” he said.

“Both offered the same £75 a month. But I was living at Reedham and Norwich Union was 15 miles away while Lotus was 30 miles away. We'd just had the first oil crisis and petrol was costing quite a lot of money in those days, so that was what decided it.”

More than three decades later, and with the business by now a very different beast from the one he'd “temporarily” joined all those years ago, Mr Scott was appointed group finance director in July 2007. It was only a matter of days before US bank Bear Stearns hit the rocks and eventually collapsed - a development that many believe heralded the start of the extraordinary financial crisis that followed.

In the intermediate years, Mr Scott - who qualified as an actuary in 1979 - had risen through the ranks of Norwich Union/Aviva. Among others, he has been group executive director of Aviva International, responsible for the development of Aviva's businesses in North America and the Asia Pacific region; he led the group's acquisition of Amerus, which significantly expanded Aviva's US presence; and he had a spell in charge of developing Aviva's Asian long-term savings business and creating new operations in China and India.

But as well as holding these key positions during his career, Mr Scott has also played an important role in some of the biggest strategic changes in the company's history. The demutualisation and stock market flotation of NU in 1997 was followed by the merger with CGU in 2000 - and then came last year's name change, with the NU branding dumped for good.

“The demutualisation and flotation was an enabler for the company to grow,” said Mr Scott.

“We knew that in the insurance industry, the big were getting bigger. The board wanted to ensure that NU could remain competitive in a world where the big players were really thriving.

“The second phase came 10 years ago this month when we brought together NU and what was effectively Commercial Union and General Accident to create a global company.”

The expansion was a necessary move in order to compete with the other big boys, he said.

“NU's roots go back to 1797 and the aim all along has been to provide competitive insurance products to our customers. To do that in today's world, you need the scale and reach beyond your own country, so I take a lot of pride in what we've achieved.”

Mr Scott is also pleased with how last year's rebranding process went, although he admitted to something that others had spent a long time trying to avoid talking about - that the name change had been planned a long time ago.

“We were aiming to create a UK-owned company that could compete globally. We recognised at the time of the merger that we wanted to move to a global brand,” he said.

“I have a tremendous affection for the name Norwich Union. It served the company very well for more than 200 years. But, sadly, it was never going to be the brand for the world.

“For a start, about 97pc of people on the planet can't say 'Norwich'. Even the Americans can't say it, despite there being several towns in America called 'Norwich'. They say 'Norr-witch'.

“We knew that to have a single company globally, we had to create a global brand and then progressively converge to it. We are delighted how that change has happened. The final part of the name change in the UK last year was very successful and our customers now recognise us as Aviva.”

But he added: “For me, it doesn't in any way undermine the history and our roots here in Norwich. We are still a major employer in Norwich and I think we will be for many decades to come.”

The rebranding has been only part of the drama over the past few years for Mr Scott, however.

The global financial earthquake began to rumble just days after he became group finance director in 2007, and he has been tasked with navigating the group's finances through a volatile period.

“The challenge has been to make sure the financial strength of the company holds up despite volatile assets and the falling value of shares,” he said.

“We were pretty proactive in that we sold a range of shares back in September 2007 before the crisis really hit. That helped protect capital, and we took a number of other actions well

in advance of the worst parts of the crisis.

“My job has been to make sure the balance sheet remains strong. Like businesses in most sectors, the important thing is to make sure that your cost base is fit for the tougher world, and we took action early on to make sure we maintained our competitiveness.

“We'll be publishing the full-year financial results soon, but all the things we've published so far, like the half-year results in 2009, show that a lot of financial strength is there.

“We did not need to have any government support. You might wonder now why we might have done, but a year ago in the depth of the financial crisis there were a range of institutions who were not able to stand on their own two feet.

“We were able to stand on our own two feet and ensure we had the financial strength to provide the protection and the savings for our customers.”

Insurers have come through the crisis pretty much unscathed compared with the banking sector. AIG's problems came about because it moved away from its core insurance business and into the financial derivatives market.

Mr Scott admitted to a degree of frustration that AIG's actions had seen the spotlight fall on to the insurance sector as a whole.

“It was a frustration in that it was very clear that AIG's problems were not caused by insurance as we know it,” he said.

“AIG's problems were caused by credit default swaps, and we had never written credit default swaps. We did not regard that as insurance. It's an investment activity that we would not regard as appropriate for our business.”

Across the Atlantic, however, Aviva has seen its own signs of volatility, but Mr Scott said the decision to buy Amerus was the right one.

“In hindsight, it's been pretty good,” he said of the acquisition that he led in 2006.

“As a global company, we wanted to be able to compete in each of the important markets, and the US remains the most important market for savings in the world.

“The biggest part of our business is looking after people's savings, and the largest pool of new savings in the world over the next 10 years will come from the US.

“We had a very small business in the US prior to the acquisition of Amerus and we wanted to get bigger. But we wanted to get bigger to a sensible size.

“When acquisitions in the US have gone wrong, it's been when companies have taken on too much. So it was a case of making sure it was big enough to make a difference but not big enough to destabilise the company, and I think we got that pretty right.”

He added: “Yes, the business has been volatile, like any other US business has been, but its ups and downs in the past two years have been very manageable for us.

“Today we are in a strong competitive position in terms of the products and services we offer and the ability to grow that business.”

Mergers, US acquisitions, rebranding and economic crises have all played their part in a dramatic last few years at Aviva for a man who started his “temporary” job at Norwich Union the best part of four decades ago, so it's perhaps no surprise that Mr Scott is looking forward to taking life a little easier.

He stepped down from his role as group finance director this week, although he is staying on for a few months as a consultant to help ensure a smooth transition.

“I'm delighted that my years of endless travelling are coming to the end. I'll be drinking a bit of cider and sailing on the Broads,” he said.

“I've lived here for 40 years but it will be a pleasure to move back to Norfolk properly. For the past 10 years, my house here has been my weekend home rather than my real home.”

Having said all that, Mr Scott won't be winding down completely. He has recently been appointed a non-executive director of Royal Bank of Scotland, and rumour has it that RBS has one or two issues of its own that need addressing. It will be interesting to see how temporary that post will be for him.