AXA UK: Strong progress with turn-around of UK operations

Underlying earnings improved £196 million to £133 million (2010: loss of £63 million; restated to exclude the contribution from sold activities).

16 February 2012

Posted in 2012

by Jennifer Chilcott (see media contact)

  • Underlying earnings improved £196 million to £133 million (2010: loss of £63 million; restated to exclude the contribution from sold activities).
  • UK & Ireland general insurance revenues increased 4% to £3.8 billion.
  • Underwriting profitability from general insurance activities restored with a current year combined ratio* of 98.9%, a 6.4 points improvement on 2010.
  • Platform sales onto AXA Wealth's 'Elevate' wrap platform increased 75% to £1.3 billion, taking funds on platform to £3.5 billion, almost 20% of the £18.9 billion now administered by AXA Wealth.
  • Architas, the multi-manager investment management business launched in July 2008 increased funds under management by 23% to £9.4 billion.


Commenting on the results, Paul Evans, AXA UK & Ireland group chief executive said:

"The sustained growth, and substantial improvement in underlying profitability, follows the successful restructure of the UK businesses completed in early 2011. Our UK operations are now focused in four core areas - general insurance for individuals, general insurance for businesses, wealth management and healthcare, all of which are demonstrating strong progress"

Business Highlights

  • In the competitive UK personal insurance market, a low cost operating model is key to providing the best value for customers. AXA Personal Lines has made significant progress in migrating its business onto a single platform that will be used to administer all products, all brands and all distribution channels. This has contributed to a substantial reduction in the expense ratio to 11.5% in 2011, with further efficiency gains expected in 2012.
  • AXA Commercial Lines has opened new branches to support commercial brokers with local underwriters, launched a new direct to consumer channel for smaller commercial customers with simple insurance needs, and will launch a refreshed product suite in the first half of this year.
  • AXA Wealth's strategic focus on the UK 'wrap platform' market with its 'Elevate' offering has led to a 75 % increase in sales and Elevate now administers £3.5 billion. During the year, we began a programme of platform enhancements to make it as easy as possible for our clients to invest with us and this work will be completed during 2012.
  • AXA PPP Healthcare has launched a new, lower cost, healthcare proposition direct to both consumers and small/medium sized businesses through Health-on-Line. Strong growth has also been achieved from the development of its international healthcare business.
Headshot of Paul Evans, Group Chief Executive at AXA UK & Ireland

Underwriting and rating actions taken over the past 18 months, together with the benefit of relatively benign weather conditions during 2011, have restored general insurance underwriting profitability. The current year combined ratio improved 6.4 points to 98.9%. This, despite a personal motor result of 101.7% where it is clear that the impact of strong rating actions over the past two years have been undermined by increasing levels of personal injury claims inflation, in particular, whiplash claims.

AXA remains the only insurer to have banned referral fees, so I warmly welcome the Prime Minister's personal commitment to rid this country of the 'compensation culture' with a package of reforms. Once the unacceptable financial incentive for claims management companies to elicit false claimants is eliminated, and the burden of proof for whiplash claims increased, drivers can rightly expect a better deal from their motor insurance. We want to spend our time quickly compensating those who have suffered genuine injury - not paying out lottery windfalls to those who choose to play the system at the cost of the honest driver. I look forward to continuing this dialogue with Government as we work together to bring about the promised reforms.

Overall, I am pleased with AXA UK's progress in 2011. Economic conditions here, and in Europe, suggest that 2012 is likely to be a difficult year for our markets, but we are now in good shape, and I am optimistic that the turn-around seen in 2011 will continue into 2012.

Paul Evans, Group Chief Executive at AXA UK & Ireland