Mark Hodges becomes managing director of British Gas at a time when the energy market is the subject of a full-scale competition probe.
He spent over 20 years with Norwich Union and Aviva before leaving in 2011 to become the boss of specialist insurance broker Towergate Partnership. He left that job in October.
Mr Hodges will receive a base salary of £625,000 and is entitled to a bonus of up to 100 per cent of salary if all his targets are achieved. He could also pick up an annual long term incentive award of up to a maximum 300 per cent of salary based on a mix of financial and non-financial measures over three years.
Centrica said Mr Hodges was experienced in working in a regulated environment, as well as driving improvements in customer service.
Chief executive Iain Conn, who joined the company in January and is due to present a strategic review in July, said Mr Hodges was ideally suited to lead the business.
He said: “He brings substantial experience of running a major UK customer facing business and has a strong track record in improving customer service, increasing performance and driving growth through innovation.
“British Gas will benefit significantly from these capabilities.”
Ian Peters, who is currently interim managing director, will remain with Centrica and take on the role of director for customer facing strategy.
Mr Hodges starts his new role on June 1.