Bluefin will pick up the largest customers
AXA is shutting down its direct business insurance field sales operation and has placed all of its 31 sales force on notice of redundancy.
AXA said it was ending direct face-to-face distribution because it had become “increasingly out of kilter with the way micro SMEs buy their insurance”.
The insurer will instead focus on building its digital offering, which has been largely responsible for doubling the number of business insurance customers over the last three years.
AXA now has 100,000 direct business customers, with policies comprising employers’ liability, public liability, professional indemnity, landlord and van insurance. Their average premium spend is £190.
Commercial lines and personal intermediary chief executive Amanda Blanc said AXA would fully support the individuals at risk of redundancy and try to find them alternative jobs at the insurer.
“They have done a tremendous job over the years, but unfortunately the momentum in this sector of the market is moving in the opposite direction and we must react to that for the good of the company as a whole,” she said.
AXA will wipe data from the laptops and disconnect the mobile phones of the 31 staff today. The insurer said this was in line with data protection requirements.
AXA’s direct business insurance customers who dealt with the sales team and placed less than £10,000 of premiums will now be serviced from its 120-strong Glasgow call centre.
The 400 clients who spent more than £10,000 on insurance from AXA will transfer to AXA-owned broker Bluefin. AXA said this would ensure those customers had a contact who could give them advice in person.
Bluefin will look for insurance on the open market for those customers at renewal.
AXA plans to recruit an IT team to accelerate the development of its digital offering with products, services and marketing investment.
Blanc said: “The online commercial direct market is moving at a ferocious pace and if AXA is to maintain its position at the forefront, we must ensure our business model is fit for purpose.
“By refocusing our resource and efforts into the digital channel, from which we derive the vast majority of our growth, we can deliver a service to micro-SMEs that is not only efficient and fit for purpose but affordable.”
Blanc said the move to a digital-focused proposition removed the ambiguity around whether AXA’s direct proposition competed with brokers.
“It is no secret that brokers have often viewed the direct sales force as a competitor to their own businesses and I have some sympathy with that view,” she said.
“The days when brokers and insurers could operate effectively together on micro-SME business are fast disappearing. These businesses are increasingly looking to online resources to secure their business cover direct and we have a responsibility to not only follow that trend but to predict its development.”