Aviva Boss Slams Insurance Industry's Tech Progress

The insurance industry is in "the Stone Age" when it comes to using technology, says the head of one of the U.K.'s biggest insurers.

Mark Wilson, chief executive of Aviva PLC, said that the London-based life and general insurer has been hiring staff from Google and Amazon in order to update its technology. He said that Aviva's customers would buy more insurance products if they were easily available online in forms that were easy to understand, something he believes investing in technology can deliver.

"I think insurance is in the Stone Age while other people are circling Mars," he said. Aviva currently spends £ 100 million ($153 million) a year on technology, he added.

The insurance industry has often been behind banks in allowing customers to do business online. Aviva launched an application to allow customers to access their accounts on their mobile phones last year.

As well as marketing more products and dealing with customers online, insurers are investing in technology to change the way they process claims and monitor risk-taking. For example, several U.S. insurers have gained permission to use drones for such tasks as assessing damage of insured property.

Mr. Wilson was speaking as Aviva gave a trading update. The company reported that it has made progress in integrating its £ 5.6 billion acquisition of smaller rival Friends Life, which was completed earlier this year.

Aviva has so far found £ 91 million in annual savings, out of a £ 225 million target, which it said was ahead of schedule.

"The acquisition of Friends Life is everything we expected it to be," said Mr. Wilson.

The group improved its combined operating ratio, a measure of costs divided by profits, from 95.9% in the first nine months of last year to 94% this year. The value of new business written, a widely used metric among U.K. insurers that measures future profits derived from policies sold, rose 20% to £ 823 million.

Analysts from Morgan Stanley said that the figures showed "a solid operating performance."

Write to Juliet Samuel at [e-mail]

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October 29, 2015 09:15 ET (13:15 GMT)

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