Although the insurers have different strategies, they are driven by the same aim, says Michelle Hannen
aIn an industry that mostly sings from the same hymn sheet, this week's announcements from AXA and Royal & SunAlliance (R&SA) appear to see the two insurers moving in different directions.
AXA is scaling back its investment in its direct-to-consumer arm, AXA Direct, while R&SA is backing its consumer brand, More Th>n, by extending the brand to sell direct to businesses.
But the two strategies are not as different as they appear. Both are driven by the Holy Grail of becoming the dominant force in the small and medium enterprise (SME) market.
The decision by AXA to cease investment in AXA Direct in favour of selling through intermediaries and corporate partners is an admission that the brand does not have the market presence of Direct Line, Churchill, or even More Th>n.
As part of the strategy, chief executive Peter Hubbard said that AXA will look to sell more commercial lines direct. SMEs, which usually require simpler insurance cover, are the most receptive to buying insurance direct, and Hubbard said a long-term aim of AXA is to usurp Norwich Union as number one in small business. But while he did not specify the company's plans for selling commercial lines direct - presumably it will not be by using the AXA Direct brand - which is, despite Hubbard's protestations, set to die a prolonged death
R&SA, on the other hand, has backed More Th>n by extending its usage to the commercial arena. A new sub-brand, More Th>n Business, has been introduced to replace its previous offer, Business Insurance Direct. More Th>n Business is aimed at SMEs with turnover of less than £1m, and while R&SA's existing 10,000 direct business customers will be transferred across, its ambitions are far grander.
The battle for ascendancy in direct commercial lines has begun. Expect Norwich Union and the multitudes of other insurers aiming to capture a slice of the SME market to come out fighting.
