AXA UK & Ireland’s interim CEO has said that the pending XL Catlin acquisition will have a “limited impact” on business this side of the pond, and has revealed the factors behind a slide in personal lines revenues this year.
AXA’s deal to purchase 100% of XL Group, announced in March, is expected to close in Q4 this year, Bertrand Poupart-Lafarge told Insurance Business.
But XL’s focus on Lloyd’s and international business means there will be little overlap with the UK, which has a strong footing in mid-market and SME business.
“Those guys are in a very different market than us,” he said. “There will be less impact on our operations in UK and Ireland.”
AXA UK & Ireland posted a 28% increase year-on-year in underlying earnings to £145 million in its H1 results yesterday. Revenues for the first half of the year were up 2% to £2.5 billion, but personal lines slipped to £797 million compared to £814 million in H1 2017.
Poupart-Lafarge attributed that slide to the loss of AXA’s affinity account with Marks & Spencer as well as soft market conditions during 2018.
“Clearly, this is not a game we like to play – to chase volume at the expense of profitability,” he said. “The market is also a little bit volatile these days, due to the Ogden rate change… though there are expectations for some of the rate change to be reversed.
“We stay very disciplined in our approach. We want to grow, but we want to grow profitably, therefore we won’t do what we think is not right for the profitability of our book.”
The UK’s commercial business saw growth in both motor and property, which the interim CEO said was partly driven by a “robust performance” in its revamped schemes proposition, in which the firm partners with brokers to help them find and grow new areas of business.
“When we fixed our 2020 ambition, we were very ambitious in terms of developing our commercial lines book. So far, we are in line with that ambition. Schemes was an area where we thought we could do more in order to get closer to the broker and to better serve the customer.
“We’ve worked more closely with brokers on some different types of proposition, both in motor and non-motor, and so far it has been really successful.”
Poupart-Lafarge said he was “more optimistic” for personal lines in H2, and also expects to continue to see growth in commercial lines and health.
