Control freak? Me? Not any more, says the chief executive of Groupama. But FXB – as he is known to all – is determined to stick to his guns. For Groupama that means more of the same (apart from motor), he tells Ellen Bennett.
François-Xavier Boisseau says, with a hint of a smile, that he used to be a bit of a control freak – “but with a small F”. The chief executive of Groupama Insurances seems far too charming for such an admission to be true, though he is not afraid to speak his mind. But today, as he welcomes Insurance Times to his glass-walled office in the heart of the City, he is on his best behaviour: engaging, witty and keen to avoid appearing as a buttoned-up chief executive.
Boisseau, known to all as FXB, has become a popular figure since taking the top job at Groupama in November 2007. With his sidekick, new managing director Laurent Matras, also a former AXA man, he presents a likeable face and helps Groupama, the UK’s 25th biggest insurer, punch above its weight. He is keen to emphasise that the company is “not boring, but consistent”, a claim backed up by its recent results. Revenues in 2008 increased 6% year on year to £432.6m, though pre-tax profit was hit by the financial downturn, falling to £18.5m from £23.1m in 2007.
He is open about his plans for the months ahead, which include focusing more on specialist lines of business, steering away from the traditional customer base of the “Mondeo man”, as well as continuing to build on the relationships secured by the acquisition of three brokers in commercial lines.
He says his move upstairs to the chief executive’s office has given him more time to think about strategic issues “and I have learnt to delegate more”. But he’s not quite learnt to let go of the reins: “You need to delegate, but sometimes you need to drill down into the details,” he adds. “The details make the big difference.”
Boisseau really is very French. He speaks perfect English, but with a heavy accent. With his natty suit and trademark bow tie, he could never be mistaken for a native Londoner. As he waves his hands expressively and indulges in frequent Gallic shrugs and pauses, his outspoken opinions take on an understated quality – but he’s not afraid to have the odd dig at his counterparts. His differences help him remain a little aloof, and he comments on the market as if from an outsider’s point of view.
Take his tough line on rates and commissions, which he tends to lump together when speaking about his larger counterparts. “Some guys in the market are claiming that they are starting to push for price increases. Well – I’m still waiting for it. Whether on commercial lines or personal lines, I don’t see anything spectacular.”
He thinks he knows why as well, and it comes back to the hands-on role of the chief executive. “Some CEOs are too remote from what’s happening on the ground. A colleague told me recently at a dinner that commission was not an issue for his company. I knew that three months ago someone in his organisation had committed to a 42% commission.”
That’s not a trap he plans to fall into. Boisseau also believes the market leaders – for example, Norwich Union and AXA – have a responsibility to lead the way on rates and commissions. So far, he has seen too much talk and not enough action.
“I’m not impressed,” he says. “It is the same people who have permitted this inflation on commission – who have to some extent promoted it – who are correcting the situation.” He does allow, however, in a subtle nod to relatively new chief executives Igal Mayer and Phillippe Maso, at NU and AXA respectively, that there is a CEO cycle in parallel to the underwriting cycle.
It must be frustrating to have such strong opinions about the market, but lack the clout to push through changes. If so, Boisseau isn’t admitting it. “We have some competitive advantage,” he insists. “We move fast, we are agile and we are very disciplined. The frustration is, yes, that it might slow our growth effort, but that doesn’t mean we can’t grow irrespective of what the market leaders do.”
Indeed, Groupama may even be able to grow at the expense of the big boys following their well-publicised withdrawal from a number of MGAs. The smaller insurer has been linked with several MGAs and has kept up a healthy appetite for the model, as Boisseau acknowledges. He confirms that Groupama is providing capacity to Giles’ retail MGA Ink, for example.
“Our position in terms of delegated authorities is quite clear and hasn’t changed for ten years. It’s always the same,” says Boisseau, who has come prepared to lay down the Groupama line. “If it’s niche, if it’s a specialist market for which we don’t have the skills or product, we are more than happy to back a specialist and to delegate in that case the underwriting and sometimes the claims.
“What we will never do is delegate claims on a general basis or move outside our underwriting footprint, our normal underwriting rules. And we will never lack the transparency and the management information. Some of the MGAs say, just give me the pen and I will give you information every month, maybe on time, maybe not on time. This is not for us.”
Is Groupama positioning itself to replace AXA and NU as an MGA capacity provider? Apparently not: “At the end of the day, we are not a lender of capital, we are not here to rent out our balance sheet. We are here to underwrite and manage claims. So, no, the vacuum left by AXA and NU – we don’t intend to fill it.”
So what does Groupama intend to do? There’s the small matter of the three brokers – Lark, Bollington, and Carole Nash – it purchased in 2006 and 2007. Unlike AXA with Venture Preference, now rebranded Bluefin, Groupama has not integrated its broking businesses, and has no plans to do so. Nor does it intend to buy any more, but Boisseau insists the strategy, as far as it went, was right.
He says Groupama chose commercial brokers that had an established specialism as well as a general book, so it could develop expertise, schemes and so on in that specialism, thus building its commercial lines portfolio. This has been working well and he is keen to point out that it was never Groupama’s intention to build its generalist books with the brokers in question. “We are still far, far below 20% share on those brokers and we will never go beyond that,” he insists unprompted, so betraying an uncharacteristic defensiveness. “I think you can’t claim to be an independent broker if 40% of your business is with someone with whom you have a special relationship.”
So the broker plan is still on track, and Groupama plans to develop its specialist model in other areas, too. For example, Boisseau wants to decrease its motor book by about one quarter over the next two to three years, in favour of more specialised risks. “This [general motor] is a market that is slaughtered by the aggregators, and everyone else is piling in,” he says. “We don’t have the skill in the long run to compete efficiently so we have to change our underwriting footprint on personal lines. If there was one big challenge for us, it is to make this change.”
On commercial lines it’s back to that message of consistency: “Our approach isn’t going to change. It’s more of the same, we have to stick to our guns.” That comes naturally to Boisseau, control freak or not: he will just be hoping the rest of the market starts to listen soon.