Chief executive admits further direct personal lines purchases "could not be ruled out"

AXA Insurance's chief executive has hinted that further direct personal lines acquisitions could follow the insurer's purchase of Swiftcover.

Speaking as the company unveiled its 2006 results, Peter Hubbard said further purchases "could not be ruled out and could not be ruled in".

But he added: "We have clear 2012 ambitions. You can get there by pure organic growth, or you can get there by smaller focused acquisitions."

AXA bought internet insurer Swiftcover last month for what is thought to have been £150m.

The acquisition returns the French-owned insurer to the direct personal lines market after its exit in 2004.

Hubbard would not comment on whether Swiftcover would become the insurer's direct personal lines brand, adding weight to speculation that further acquisitions were planned.

Analysts are divided over whether AXA would want to make further direct personal lines acquisitions.

Some question the merit of having more than one direct brand.

Moody's analyst Timour Boudkeev said: "It is difficult to see what advantage there is to having another brand unless it is something bigger."

But Boudkeev said he expected further acquisitions to follow.

Meanwhile, AXA saw profits from UK general insurance business increase 19% in 2006 compared to the previous year.

Underlying earnings were £150m in 2006 against £127m in 2005.

Revenues were up 9% to £2bn, aided by strong growth in its private motor, household and commercial property lines.

The insurer's Irish business suffered from the effect of fierce competition. Revenues were down 4% and the combined ratio deteriorated to 97.1% from 80% the year before.

AXA's motor book 'challenge'
AXA's private motor book continues to hold back the profitability of the insurer's personal lines portfolio.

The personal lines combined ratio improved one point to 104%, despite profitable performances from its household and creditor lines. "The challenge is the motor profitability," said AXA chief executive Peter Hubbard.

The insurer would not disclose the profitability of the motor book, only to say it was "moving in the right direction, but it is not where we want it to be".

AXA wants to become a top player in the motor market, despite languishing near the bottom of the top 20 in recent years. Its private motor book grew by 42% in 2006.

Hubbard said: "We are not looking for the same level of aggressive growth in 2007 - the Swiftcover acquisition will help growth."

He added that he "hoped Swiftcover will make a profit in the medium term," adding: "We wouldn't have bought it otherwise."