Private car book tops £100m in the first half of 2006
AXA's determination to become a renewed force in the private motor market was evident as the insurer reported a 42% growth in its private car book in the first half of 2006.
The insurer's motor book topped £100m in the six months to 30 June 2006 on the back of an "updated pricing strategy" that increased premiums by £30m.
Profits also soared during the period, with underlying earnings increasing by 39% to £64m, buoyed by a strong commercial lines performance and an improving loss ratio.
AXA Insurance chief executive Peter Hubbard insisted the increase in motor premium volume was achieved "not just by putting down prices".
He attributed the sizeable growth to an expansion of the insurer's "underwriting window" to include younger drivers and a wider range of acceptable cars. He added that the company increased private motor rates in July.
General insurance premiums increased overall by 9.4% on the first half of 2005 to £1,059m. The combined operating ratio dipped below 100% to 98.6%, helped by a 57.4% loss ratio and a profitable commercial book.
"Our commercial lines profitability is extremely good. The market is still very competitive in SME market, but we don't see our profitability deteriorating," said Hubbard.
He added that the company had increased rates on commercial property during the first half of the year.
But the company failed to make an underwriting profit in personal lines, achieving a combined operating ratio of 101.1%.
Hubbard admitted there was "still some way to go" to reach its target of 95%, adding that the company would be updating its pricing models in household, creditor and travel lines in a bid to achieve this.
He said changes in the pricing of private motor risks had improved the loss ratio and combined operating ratio.
A future of acquisitions
AXA has not ruled out buying brokers now it has been given the green light to make acquisitions in the UK.
Chief executive Peter Hubbard told Insurance Times: "The time has come to use selective acquisitions to plug the gaps in our portfolio."
While he would not comment on the nature of the "gaps", Hubbard said: "We would not rule out buying brokers. We will always look at whether we can get closer to the customer."
He added that any acquisitions would have to "stand on their feet financially".