Joining Aegon after five years at Direct Line Group, Mike Holliday-Williams is a CEO with a mission to make customers’ and partners’ lives easy, remove friction and create engaging user journeys.
This may sound like boring back office stuff that providers should be doing anyway, but for Holliday-Williams, now a year-and- a-half into the role he took over from Adrian Grace, the key challenge is to bring to pensions the sorts of consumer experiences that are common in other channels.
Holliday-Williams’ predecessor Adrian Grace took Aegon from an employee-heavy life insurer and turned it into a massive platform- based business with a big focus on asset growth. So what does Holliday-Williams want for a legacy of his time in the role?
“You might describe our platform as the biggest. I’d rather be the best. What I’m trying to do is raise the bar in terms of what that looks like, in particular in workplace. What does great really look like and where do we need to invest.
“You will have seen from the capital markets day that in the group we’re very much a core part of the overall business. With that comes an ambition to grow the business.
“And to do that we need to continually invest in the business, in the right places that not only differentiate us, but really make sure we’re leading in the trends in the market and not following.
“I think we’re on that journey. When you invest heavily in a business, obviously you’ve got to derive benefit,” he says.
Holliday-Williams believes that a better user experience is at the heart of growth, client retention and improved profitably.
“The things that are really important are personalisation, the member journey, the member engagement, championing that customer. We’ve done work around personal videos. We’ve launched our app, that is really on the front foot and people seem to really like it, to improve a general level of engagement. Improving our overall journeys and making them more personal and easy to use is key and we’ve got lots of ideas on how we do that. We have a strong roadmap ahead of us.”
So what will that mean for workplace pensions intermediaries?
“We’re changing the whole digital experience on the old ARC system right now. That’s going to take some time to go through. But that’s a key corporate adviser channel because it goes from workplace all the way through to retirement to advice,” he says.
So what learnings can he bring from his general insurance background, and how does life and pensions differ?
“At Direct Line we had partners, including the likes of Nationwide, but we were very much a direct to consumer business in a mainly digital world. Aegon is much more a consumer mindset business, while working with corporate advisers, intermediaries, as part of that. Success will come from having that customer mindset, and that ‘member you remember’ mindset.
“Obviously, the general insurance sector has changed massively with the growth of aggregators and the level of switching is quite different. With pensions and savings you’re talking to a customer over their lifetime, so there’s so much more responsibility in that than in insurance where you’re switching and there’s less brand loyalty.”
Holliday-Williams says this different mindset, of serving people over the long term, is part of what has attracted him to the role. “Because there’s a deeper sense of purpose of why we’re doing this. There is this sense of responsibility, whether people have a lot of money or a small amount of money. The joy of people’s retirement is in the hands of all of us in this industry. So there is a deep sense of the importance of how we help people on that journey. And that’s a different mindset to in insurance where price and service are key.”
The days of a general insurance broker sitting in a shop in every high street in the land are long gone, a transformation in part heralded by the arrival of the Direct Line telephone on wheels in 1990s TV commercials – so should current sectors of the market fear obsolescence through digitisation?
Holliday-Williams doesn’t think so. “It’s more a case of addressing a lot of the manual process in our industry. The technology that is there in the general insurance industry is there in the pensions industry, but here it is often used in a clunky way. The digitalisation of everything, whether it’s an adviser process, a customer process, an employer process, has technology right at its heart – and these are the changes we need to make happen. “How do you take more products to market quicker? How do you test things quicker? How do you change journeys quicker? How do you integrate channels?”
General insurance uses a massive amount of data on individuals and their property for underwriting purposes, but data science is generally seen to be in its infancy in the world of life and pensions.
“Using the data that we’ve got, especially for a big platform like ourselves, is really powerful. Using that effectively, whether it’s giving employers insights, corporate advisers insights, it is a real powerful path that we’re going to go down.”
The subject of data raises questions as to the extent to which techniques used by Amazon, Facebook or even Cambridge Analytica will be embraced or are already being embraced by pension providers and other financial services players. This, say some tech innovators, could see Experian- like credit ratings data used as a tool for assessing attitude to and appetite for risk, potentially tying these insights into a smart default structure. Holliday-Williams sees this as running before we can walk.
“You’ve got to be really careful,” he says. “We’re not using data to cross-sell in this world. We’re using data to identify a need or talk to a customer about the need. Data is more about making things easier for customers. So in insurance it’s about making sure the customer only has to give the data once, and then we can use it to populate things. Is this your data? Is this where you live? It’s making it easier on the journey, asking it once.
“In general insurance underwriting is a massive piece of the jigsaw. But data is not 100 percent accurate, which means that you’ve still got to verify. Somebody can make a claim [on a car policy] and it goes down as you whereas really it could be your son – people get data wrong.
“And in our world, it’s the same. You can’t assume that the data is going to be right.”
Net zero challenges
One of the biggest challenges facing CEOs of businesses of all sorts is embracing the net-zero commitments that are increasingly been seen as a hygiene factor by large corporates. Holliday-Williams says stepping up to this challenge is made somewhat easier by the fact that acceptance of the need for change is so widespread.
“In some of the surveys that we’ve done, half the people said this is mandatory – you’ve got to do it. And you can see it in all the commitments that are being made out there and indeed in our own commitments to net zero.
“In making those commitments, and in the granular plans behind them, I think that is the only way that the world will shift. “Even in my short time in this industry there seems to have been a massive shift in the last one-and-a-half years. We’ve gone from a full net zero commitment by 2050, which feels miles away, to trying to get to 50 per cent by 2030.
“From an investment perspective, we have got a plan and we will constantly chip forward on that plan. We will work with asset managers on this. The demand is there from the master trust, from the corporate advisers and more and more from the employers.”
He adds: “Climate and environment is one thing, but there’s a broader sustainability agenda out there too. One of our big strategic objectives is having a positive impact. And that is not just around the climate. The environment and ESG is very much around the society we’re operating in, inclusion and diversity, the charities in the communities that we support as well.”
Aegon’s main asset management partner for workplace pensions is BlackRock, which has taken some flak in the media for signing up to ClimateAction100+ but then voting against several resolutions that the pressure group had heavily promoted. Has he sensed much kickback for the BlackRock partnership?
Holliday-Williams says: “We haven’t had kickback on using Black Rock, but […] we’re working very heavily with them on their journey and communicating their journey and their commitment to it. And I think that’s where BlackRock are working hard with us, to both communicate the progress that they have made, and where they’re going in the future. That’s really important. BlackRock has a massive impact on the world.
“Our conversation is very much about ‘guys, you’ve got to talk about this, communicate the commitment, demonstrate it in the investment portfolio’. And whilst people love Lifepath and the value of it and the returns on it, we’ve got to move it on from an ESG perspective and they are deeply committed to that as well. So how we communicate that and talk about it to something that we’re working on.”
Holliday-Williams says the ESG, environmental and diversity debates are considerably more front-of-mind in the workplace benefits market than in the individual wealth management channel. “When I’ve sat down with benefit consultants and corporate advisers this year, the second item on the agenda, if not the first, is sustainability and the ESG journey, whether it’s in your investment solutions or you as an overall business. That’s fundamentally because employers are demanding that,” he says.
Making Aegon a business that supports individuals’ financial wellbeing is another key plank of Holliday-Williams’ strategy. “I hate these stats that show nine out of 10 people don’t have an idea of what their long term financial plan is. I can’t get that. I just don’t get it.
“So thinking about wellbeing, cracking the engagement issue, using technology and data to do that and doing it in an engaging way which is relevant in that particular moment in that person’s lifetime, is critical. For somebody as big as Aegon, this is a role we can really play and differentiate ourselves, so that’s where we’re focusing. Obviously we’ve got to win business as a result of that, we have got to grow and we’ve got to deliver the value to the member – but that’s where we can be brilliant.”