Hubbard says FSA consultation should be emulated by government

Government officials must take a more active approach to gathering industry views on liability, warned AXA chief executive Peter Hubbard.

Hubbard said: "I am impressed with the way the FSA has gone about its consultation with the industry. Its consultation documents are well drafted, clearly thought through and invite the participation of the industry."

But he added: "The Treasury and Office of Fair Trading (OFT) have not made any attempts to canvas our views.

"The ABI has its dialogue, but it encourages us to talk as individual companies too".

Hubbard said he hoped that the OFT consultation would draw attention to the key issues that the industry has been discussing, such as the level of legal fees involved in liability claims.

Meanwhile, Hubbard said the ABI is close to finalising a response to the European Commission's proposal to include insurance within the scope of new e-commerce regulations. Hubbard, who is leading the initiative, said that "basic principles" documents are almost ready.

Hubbard explained that, on one side of A4, the document enshrines principles such as any regulation must be proportionate to risk.

He said following this assessment the resulting regulation must be subjected to cost-benefit analysis.

Peter's pledge

In May, AXA chief executive Peter Hubbard announced a radical restructuring of AXA and promised to reinvest to improve performance. Is Hubbard meeting his targets?

Promise

  • To use only one IT system for commercial lines (I90) and one for personal lines (Huon) by the end of 2003

  • To cut the number of personal lines agencies from 10,500 to 5,000

  • To replace the existing telephone system with one that would allow AXA to cut phone numbers from 1,900 to 50 (with no reduction in capacity)

  • To launch a new, interactive claims handling and tracking process on one claims platform, where one claims manager takes ownership of claims cradle to grave

  • To increase commercial lines to 60% of AXA's book by end 2004

  • To roll out businessrisk.com

  • New customer-driven products to be developed

    Progress

  • All new business is entered onto Huon or I90 and all existing business will be transferred in the New Year

  • Only 5,200 personal lines agencies remain

  • The system will go live by the end of January. Over 400 phone numbers have been eliminated already

  • Cradle-to-grave system piloting in Ipswich on motor claims and in Morecambe on household. Most of the remainder will transfer to the new system in March

  • Commercial lines book will represent 60% of AXA's business by end of 2003

  • Premier and Prime brokers have access and Spirit brokers will have access in the new year

  • New personal lines products, with add-ons, will be available in February or March