Give us a brief introduction to Aviva and the area in which you work.
Aviva is the UK’s largest insurance company. We cover products across the insurance landscape – general insurance, life and savings, health insurance and asset management. We are in 16 different countries globally, have 34 million customers, and over the past two years have been through quite a lot of transformation. As part of that, I work in the area that is really at the forefront of our innovation agenda and our digital strategy.
What types of key technologies and business models do you see as an opportunity or a threat to your business?
We are seeing some significant trends in changing consumer behaviour and also in underpinning technology. If I give a few examples, we certainly see the internet of things (IoT) landscape as a particular opportunity and threat, as the world becomes more connected. That will seriously have an impact on insurance business models. To give a couple of examples, the connected car, as we see the future of autonomous and connected vehicles, that will impact the way that we do business.
Connected health is an interesting area, as people begin to become much more aware of their wellness and their health data. That will impact how we approach propositions and customers.
Other areas I think where we are seeing significant change include analytics. The move towards machine learning and artificial intelligence will have an impact on what we do. Data is very important for the insurance industry, and certainly new forms of data via IoT and such like, and the analytics that sits on top of that is important.
I am also seeing a number of emerging business models and distribution changes. A lot of people are talking about the sharing economy and peer-to-peer markets. Again, they have not quite hit insurance like they have in financial services as a whole, but there are opportunities and threats in that space.
Describe your approach to corporate venturing.
We have been through quite a transformation in terms of our approach to innovation. Part of that is recognising that corporates cannot innovate really well internally and on their own. They need to be part of the broader and wider ecosystem. So we have a range of ways that we engage with other generally small businesses which are doing innovative things in our space.
One of them is deploying capital. We set up a corporate venture fund. It is not a fund per se. It is an off-balance-sheet investment. We are making direct equity investments into early-stage, high-growth-potential companies.
Our sweet spot is around series A, where we write cheques of up to £5m ($7m), and we are looking to invest around £20m a year over the next five years to build up a portfolio of companies.
Aviva Ventures is not a separate legal entity, it is part of the Aviva group, but it is run as if it was a separate business. We have an investment committee from a governance perspective, and we effectively have a small team doing deals end to end.
You have been involved in the GCV Academy, and you understand the need to integrate what you are doing in your venturing. Give us an insight into how you link your CVC approach to the other parts of innovation and venturing teams at the core business.
CVC is part of our broader innovation strategy. It is critical from a corporate venturing perspective that that link is there. For us this is all about strategic return. We work very closely with our innovation and new business team, who work with startups at a slightly earlier stage of development, running tests, pilots and proposition development. The work that we do is about bringing additional, opportunities, insights, technology, capability back into the core organisation, either to challenge current strategy or support our strategic ambition.
As an example, in the deals that we do, I am the investor, but we will also align the portfolio company to one of the areas of our business where the strategic alignment is relevant. In a recent example, we made an investment in a company called Cocoon, which is an IoT play, a smart home security system. And we are aligning them, as a portfolio company, with our prevention and services division, who are looking at how IoT propositions are part of insurance going forward.
What types of partners do you work with and which ones do you find most effective in building long-term relationships?
We work with a wide range of partners, from other CVCs, VCs, to lawyers, bankers, brokers and some academic institutions as well. Each partner offers something different. We particularly get the benefit of co-investing with other venture capital firms. And we certainly get a benefit in terms of dealflow. By working with other corporate venture firms who understand what we are doing, we understand what they are doing and we can share opportunities.
Introduce the members of your team and describe how they engage with the core business.
We have a small team. It is in two parts effectively. There is myself and my colleague Shah, who work on the venturing full time. Shah is really the deal lead, and his background is in corporate finance.
Then we also have, which is critical, a virtual team across the business. We have representatives from our legal department, our risk, our tax, our finance and the innovation and new business team. They effectively work with us consistently. We have a weekly session where we all get together, where we share what is happening in terms of deals and the other work we are doing with the business.
That is important for us. It is not just about the investments we make – it is about being out there as an investor in the marketplace and seeing a lot of trends, technologies and people, and what we try to do is share those opportunities and challenges into the wider business as well as just focusing on deals.
For example, I might work with members of the virtual team on different technologies or on different themes we are looking at within venturing and share learning. Those guys are important as they link into the other business units.
I am meeting you in the Aviva Digital Garage in London, where we are going to be running our academy in June. Describe it in terms of the location and the feel we have here.
Aviva’s Digital Garage is in the heart of the fintech area of London, based in Hoxton Square. We have a three-storey building here. We also have a building next door and one just down the road. What we have tried to do is create an environment that is non-corporate, conducive to creativity, and is where some of our digital technology and innovation team sit and work. There are some great meeting spaces, along with some great working spaces.
We have also recently opened a version of this in Singapore. And as we look to engage in the broader community and the fintech community here in London, it is important that the location matches those aspirations. I particularly enjoy using a facility like this when I am working with small businesses because it is a much better environment than a corporate headquarters style of environment.
You are building new technologies, new business models and what I would describe as innovative new value chains. How do you see the challenges to the core business when you are developing these new models?
Part of our challenge is that we are a very, very big organisation. We have ambitious plans in terms of our growth. The challenge is getting the balance between delivering the business of today and understanding the businesses of tomorrow, so we can both deliver competitive advantage today and also build the new propositions that mean we continue to thrive going forward.
How do you measure your financial and strategic performance?
This is an interesting one, and often one that corporate venture capital gets asked, because it is an important aspect. We try to balance financial performance with strategic performance. We are reasonably new as a CVC, but we have set a baseline in terms of financial metrics. We look at return, but we also look at – on a deal-by-deal basis – how the portfolio company learnings, insights, capabilities, technologies, propositions, can come off the back of that. We measure it, I guess, in terms of what we have learnt and how we have developed as an organisation and how we have shifted some of our thinking and potentially our propositions on the back of making those investments.
What do you do to relax?
My main modes of relaxing are spending time with the family. I am also a keen cook, so I think when I am looking to relax most I like to be in the kitchen, cooking with a glass of wine and some great music in the background.