AXA is cutting 700 jobs and closing five centres across Britain in a bid to turn its non-life fortunes around.
The commercial claims handling centre in Cardiff will close, along with the personal lines claims call centre in Colchester. Branch offices in Preston and Plymouth will close and the commercial lines service centre in Bolton will transfer to Haverhill. AXA hopes to be able to redeploy 150 of the 700 staff.
AXA chief executive Peter Hubbard said the measures would cut costs by 20% by the end of 2004. He added that sales revenues would rise by 30% in the same period.
"By the end of 2004, we will be achieving a combined operating ratio of 104% on continuing business," said Hubbard. He added that the 15% return on equity demanded by AXA's French parent group could be achieved in 2005.
AXA plans to reinvest £100m of savings. Hubbard explained that most of the money would be spent on improving its IT systems.
The major focus of the investment will be to cut the number of IT systems in use within the company. Because of mergers and acquisitions, AXA has nine legacy systems. This would be cut to two, said Hubbard.
All commercial lines business would be handled on the I90 system and all personal lines on Huon, Hubbard explained. He expected all new business accepted by the year end would be entered on either of the systems. The legacy systems would be integrated into the core platforms by mid-2003.
Some of the money would also be spent on new telephone systems for call centres. Hubbard said the aim was to direct calls to the right decision makers within three or four questions and that the decision makers would settle claims in one call.
"In time, over 90% of claims will be settled this way, whether we can do this by 2003-2004 is heavily dependent on whether we can implement it," said Hubbard
"Policy issuant and renewal will be as automated as possible." He said the plan was for quotes to be instantly available and documentation available in 24 hours.
Hubbard said AXA's portfolio would change over the next 30 months. By the end of 2004, commercial lines would represent 60% and personal lines 40% of AXA's business. This year commercial lines were bigger than personal lines for the first time, he added.
After a period of cutting back affinity deals, AXA had plans for two or three deals with banks, utilities, financial services companies and retailers, said Hubbard.
The strategic review had taken six months to complete and involved over 100 people, said Hubbard. He added that no consultants were used. "That means we have great ownership of the plans," he said.