Richard Harvey

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Chief executive officer, Aviva; chairman, Association of British Insurers

Nationality: British.

Born: 1950, in Gloucestershire, United Kingdom.

Education: University of Manchester, degree in mathematics.

Family: Married; children: three.

Career: Phoenix Assurance, trainee; Sun Alliance, various positions until 1986; 1987–1990, general manager, New Zealand operations; Norwich Union, 1992–1993, regional chief executive officer, New Zealand; 1993–1994, general manager, finance department, UK; 1995–1997, finance director; 1998–1999, chief executive officer; CGNU (renamed Aviva in 2002), 2000, deputy chief executive officer; 2001–, chief executive officer; Association of British Insurers, 2003–, chairman.

Address: Aviva, St. Helen's, 1 Undershaft, London, EC3P 3DQ, United Kingdom;

■ In 2001 Richard Harvey became the CEO of CGNU, which became Aviva the following year. CGNU was created in 2000 following a merger between CGU and Norwich Union in which Harvey was highly instrumental. By 2004 Aviva was the seventh-largest insurance group in the world, offering commercial, marine cargo, health-care, and personal-insurance products and long-term savings and fund-management services to 25 million customers. It employed close to 60,000 and had sales of £28 billion from continuing operations and more than £200 billion in assets under management. In 2003 Harvey became chairman of the Association of British Insurers, the UK's industry trade association for insurers.


Aviva's history dates back to two insurance companies, Commercial Union Fire Insurance (CU), created following the Great Tooley Street Fire of London in 1861, and General Accident and Employers Liability Assurance Association (GA), created in 1885 in Perth, Scotland, which sold workers'compensation insurance. Over the years, both companies expanded throughout the world through mergers, acquisitions, partnerships, and divestitures as their individual fortunes waxed and waned. In 1998, unable to compete on its own, GA merged with CU to form CGU. In 2000 CGU merged with its rival, Norwich Union, to create CGNU, which changed its name to Aviva in 2002.

Harvey initially wanted to be a nuclear engineer, but at the time there was a glut of nuclear engineers and he felt he would never make it. So he decided to become an actuary. He began his career right out of university as a trainee actuary with Phoenix Assurance, rose through Sun Alliance's ranks to general manager of their operations in New Zealand, and began his career with Norwich in that country in 1992 as CEO for the region. He returned to the UK in 1993 to take over as general manager of the company's finance department. On June 16, 1997, he floated the company in an initial public offering. Almost 3 million qualifying members received on average of 300 shares each; nonprofit members received a fixed number of 150 shares. Harvey told an analyst for BBC News that it was undoubtedly the proudest moment of his career: "It was easily the largest and most complex project for which I have been responsible. It combined every aspect of the business, its financial construction, geographical split, and customer relationships," he said (May 10, 2004). Harvey became CEO of Norwich in 1998 and was highly instrumental in the merger with his rival company, CGU, about which he commented: "We believe that this deal will create significant value for both sets of shareholders not only through the considerable cost savings and efficiencies achievable but also through our ability to capitalise on the significant opportunities for profitable growth, particularly in the long-term savings market [which] will be our key strategic priority" (press release, February 21, 2000). He was made deputy CEO of the new CGNU in 2000 and became CEO in 2001.


Harvey was also highly instrumental in CGNU's controversial name change to Aviva in 2002. The new name was chosen by members of the corporation as part of its strategy to become recognized as a world-class financial-services provider. Aviva became the umbrella for more than 50 different trading names around the world. Some companies, such as Norwich, retained their name but added "An Aviva Company." Announcing the new name, Harvey said: "We are creating a new and powerful international financial services brand…. The Aviva name tested positively in consumer research around the world, bringing with it associations of life, vitality and living well. This matches the aspirations we have for our customers" ("About Our New Name"). He indicated the new name would benefit the company's trading business by allowing them to increase the value of their corporate brand and to create more cost-effective marketing opportunities, particularly with advertising and sponsorship.

Shortly after changing its name the company shocked shareholders and analysts by announcing a dividend cut of 40 percent in order to save £350 million that year. Harvey said that investors understood Aviva had evolved into a very strong growth company, with 70 percent of its profits derived from life insurance and 30 percent from general insurance, with a strong focus on personal policies rather than large-company coverage. He said the reduction in shareholder payouts was essential to enable the growth the company was aspiring to. He then pledged to increase dividends by 5 percent the following year. Not everyone welcomed the name change and the dividend cut, however, not to mention the salary increases awarded to top executives. At a February 20, 2002, shareholder meeting, 96 percent of large shareholders voted in favor of the name change. But Harvey and Aviva's chairman, Pehr GyIlenhammar, came under heavy fire from smaller shareholders who said the change was "silly" and "unnecessary" and too similar to a bus company called Arriva. The executives were also criticized for big pay increases (Harvey's rose 16 percent to £978,000 annually) at a time when the company was cutting policyholder dividends by almost half. Shareholder Andrew Gibson from Glasgow commented: "Policyholders are being impoverished by the directors' culture of greed" ( Knight Ridder/Tribune Business News , April 24, 2002). The dividend cut created share-price declines of more than 10 percent.

In February 2003 Aviva announced that it was establishing a call center in Bangalore, India, with a staff of 1,000 to handle insurance claims while also cutting 1,600 jobs on the home front in an effort to boost savings, even though it had made robust operating profits of £1.8 billion in 2002. Later that year Harvey announced they would create an additional 2,500 jobs in India, where highly educated people could be hired for a fraction of what they would be paid in the UK. The Indian workforce would provide back-office services, information technology, and call staff. Although not ruling out the possibility of further layoffs in the UK, Harvey said that 80 percent of the jobs in India would be accommodated by expansion, current vacancies, voluntary retirements, and traditional staff turnover. "We are operating in an increasingly competitive environment. Our customers want value for money products and high levels of service…. Our staff in India are an important part of this process and our experiences to date have been positive," he said ( , December 5, 2003). Harvey was criticized sharply for the moves, which Dave Fleming, a union negotiator with Amicus, called "deplorable … based purely on greed." Harvey defended the moves and commented: "Making decisions that will affect our staff is always tough, but by taking action to remain competitive we will secure a long-term future for our business" ( e-fusion , December 4, 2003).

In March 2004 Harvey once again came under heavy criticism, this time by members of Parliament in the Treasury Select Committee, for accepting what was described by the Manchester Guardian as "bumper raises" when millions of policyholders were facing shortfalls on mortgage endowments and with-profit pension plans. The committee told Harvey that his 45 percent salary increase between 1999 and 2002 was "way out of line" in light of the fact that policyholders were suffering. In 2003 Harvey's pension plan was increased £1.1 million to £5.6 million. He also received £1.1 million in pay and benefits, including a £312,000 bonus that the company said reflected Aviva's exceptional performance that year. Indeed, Aviva reported operating profits for 2003 of £1.91 billion following actions that cut costs and improved margins (March 23, 2004).

In early 2004 the company shut down one of its insurance-brokering businesses in the UK, which resulted in 1,600 job losses. In a June 9, 2004, report, an analyst noted that Harvey cut thousands of jobs, sold some assets, and moved a significant part of the workforce to India after the longest bear market since World War II, which seriously eroded capital. Aviva posted a net income in February 2004, its first since 1999, amid a rebounding stock market that boosted investment gains and created a rise in insurance earnings.


In July 2003 Harvey took over as chairman of the Association of British Insurers (ABI), a position that Antonia Senior described as "one of the most dangerous jobs in the industry" ( Times Online , October 18, 2003) due to the fact that of the previous ten chairmen, seven left their primary jobs—often months or years earlier than planned—shortly after finishing their stint with the ABI. "Is it the strain of holding down two jobs that taxes these insurance bosses? Or is [it] the stress of representing an industry that is seen as rapacious and amoral by consumers and government?" Senior asked, while noting that Harvey seemed totally unconcerned about holding down two such challenging positions at once. Senior commented that opinions about Harvey varied widely. Insurance-company workers saw him as something of a maverick whose outspoken manner was worrisome: "We tend to prefer people who compromise more," said one senior executive at a rival company. People outside the industry, however, tended to see him as excessively institutionalized, lacking the charisma and dynamism that traditionally appealed to investors. Senior quoted one analyst as saying: "Insurance chief executives are not a great bunch. But of all of them, Harvey is the least likely to elicit an opinion." Senior also noted that Harvey had the ability to evade difficult questions and that, regarding his controversial pay award, he "talks a lot and says little." When asked by a BBC News analyst for the best piece of business advice he could give, Harvey indicated that leaders should always give two commendations for every criticism, adding that "It is just as important to reinforce the positive … as it is to correct or criticise the less acceptable. In fact, this balance makes it easy for anybody to accept constructive criticism, whilst accepting that they are valued for the majority of their work which they perform well" ( BBC News , May 10, 2004).

sources for further information

"About Our New Name," .

"Aviva Cuts 700 Jobs at Its Life Unit to Trim Costs (Update2)," , June 9, 2004, .

"Aviva Offshores 2,350 Jobs," e-fusion , December 4, 2003, .

"Aviva to Create 2,500 Jobs in India Agencies," , December 5, 2003, .

"Best Insurance to Ensure a Good Future," BBC News , May 10, 2004, .

Jones, Rupert, "Insurance Chiefs' Pensions Up by Pounds 1m," Guardian (Manchester), March 23, 2003.

"Norwich Union plc and CGU plc Merger," press release, February 21, 2000, .

Senior, Antonia, "Insurance Man Takes Front Line in Savings Battle," Times Online , October 18, 2003,,,630-858397,00.html .

"Smaller Shareholders Criticize Plan by British Insurer CGNU to Change Name," Knight Ridder/Tribune Business News , April 24, 2002, p. 1.

—Marie L. Thompson

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