Maso would consider sale of broking arm

AXA has rejected numerous approaches for its broking business, Bluefin, but would consider selling at a very high price, Philippe Maso, AXA Insurance chief executive, said this week.

In an exclusive interview with Insurance Times, Maso admitted that in the current economic climate he would not have bought the broking businesses that make up Bluefin.

He added that AXA received regular approaches from parties interested in buying the £700m gross written premium business, but that it had no plans to sell.

However, when asked if he would sell the business, Maso said: “For an enormous value, I would probably consider it – but it would be very, very expensive.”

Maso added that there was a strategy in place for Bluefin, which chief executive Stuart Reid was fulfilling with great success, and that his “preferred strategy” was to press ahead.

He said AXA was approached by bidders “all the time”.

These were the same parties that had wanted to buy Bluefin’s constituent businesses – Stuart Alexander, Layton Blackham and Smart & Cook – when AXA snapped them up at the end of 2007.

Bluefin’s acquisition plans, which would have allowed the business to grow to £1bn gross written premium, have been put on hold because of the recession.

Maso said: “We moved into distribution at a time when the market hadn’t crashed, the crunch wasn’t there and the consolidation was moving on at a fast pace, with enormous value bleeding out of the insurer part of the chain to the broker part.

“We wanted to be part of that game and we thought the best thing to do was acquire, so we entered that market.

“But the strategic conditions have changed fundamentally. Even AXA Insurance is different, we are on a different path, so it is absolutely valid for Bluefin to concentrate on its organic growth and its organic efficiency, and this will take another year to be delivered.”

Maso said AXA had successfully driven down commissions, and expected to lower them by an average of five percentage points to the low 20s over the next three years.

He said the insurer would continue to review its remaining managing general agencies following its withdrawal of capacity from Primary Group’s UK Underwriting last month.