AXA cools rumours of Provident bid

AXA has attempted to play down speculation that it will bid for the insurance arm of Provident Financial, which was put up for auction this week.

The French insurer, which last week bought regional brokers Stuart Alexander and Layton Blackham, had been touted as a potential buyer of the motor insurer, which could be worth as much as £225m.

AXA, which is looking to grow its private motor business significantly, has been linked to other motor insurance businesses in recent months including Carole Nash and the AA.

But Mark Cliff, markets managing director at the insurer, told Insurance Times that AXA did not need to buy a motor insurer when it had already achieved significant organic growth in its motor book.

"I don't see a real necessity to acquire when we had 40% [organic] growth in 2006," Cliff said.

He added that AXA being linked to so many potential acquisitions was "not justified".

While AXA UK is thought to have a considerable war chest available for future purchases, it is thought its acquisition strategy is now aimed at growing its commercial business.

Reports this week suggested that Australian insurer IAG would also put in a bid for Provident Insurance.

IAG has made clear that it has significant funds set aside to buy more UK motor insurance businesses.

It bought Equity Insurance Group for £570m in December and Hastings Insurance Services for £140m in September.

Fortis and investment firms Barclays Private Equity, Duke Street Capital and Englefield Capital have also been touted as potential bidders.

Provident confirmed it had received "third party approaches" for its insurance business and that it would "commence discussions with a view to establishing whether greater shareholder value could be created through the sale of that business".

Provident Insurance, which analysts predict could make £30m profit this year, specialises in motor insurance for women drivers, older cars and second cars.