New products to boost 'underweight' household book

AXA is set to launch a range of new products in 2006 as part of its drive to strengthen its position in personal and commercial lines.

In a bid to double the size of its UK business by 2012, AXA has announced its intention to break into the top flight of personal lines insurers and to dominate the affinity market.

This is in addition to continuing its battle to usurp Norwich Union as the number one SME insurer, which AXA chief executive Peter Hubbard revealed last year (News, 2 Feb 2005).

AXA distribution director Mark Cliff told Insurance Times: "We still want to be number one in SME. But in personal lines we want to be a top three player. In corporate partnerships we are in the top three but we want to be number one."

The insurer's ambition of breaking into the top three in personal lines will, in part, be fuelled by its push to dramatically grow its private motor book.

As revealed by Insurance Times last month, AXA is targeting a top five position in motor, reversing the recent decline in its presence in this sector (News, 26 January).

Cliff said the company would also be looking to grow its "underweight" household book, in addition to its creditor businesses.

"We want to grow penetration through brokers and corporate partnerships," said Cliff of AXA's household portfolio.

He added that the company would be looking to follow the launch of its mid-net-worth product, AXA Extra, last year, with further new personal lines products, which could herald moves into "more specialist areas".

"We need to widen our footprint in personal lines," said Cliff.

In commercial lines, Cliff said "good" risk selection and risk improvements had produced a book of business that would provide the basis for growth. "We now have a portfolio which we are happy with and which we can grow. We have a good reputation and good security."

He said there would be a focus on product innovation, with a "push" on new products. These, said Cliff, would be in "mainstream SME products rather than specialist ones". But he added: "As part of our product differentiation we will look at specialist areas to support our existing product base."

On e-commerce, Cliff said AXA would be looking to increase brokers' usage of its Business Risk portal. He said 66% of all commercial transactions went through AXA Business Risk, but only 20% were input by brokers "at the point of sale".

"The challenge is to increase broker usage," he said. "Connectivity is the way forward and Imarket is relevant to that. We need to drive connectivity, it gives us efficiency and advantage. We cannot go at the pace of the slowest [insurers]."

AXA is the fifth largest UK insurer with a GWP of £2.9bn at the end of 2004.

Broker purchase 'not ruled out'
AXA has not ruled out buying a broker as part of its distribution strategy.

Mark Cliff, distribution director at the insurer, told Insurance Times, that he was "keeping an open mind" on the issue.

He implied that AXA might be forced to follow suit if a rival started to acquire brokers.

"If a competitor went out and starting buying brokers it would change the dynamics of the market," said Cliff.