Andy Homer has been replaced as AXA Insurance chief executive by Lloyds TSB planning and strategy director Peter Hubbard. Hubbard takes over on 1 December.

A source close to the company said that UK group chief executive Dennis Holt came to an agreement with Homer about leaving the company some weeks ago. Holt joined AXA in August from Lloyds TSB where he was a main board director. The source confirmed that Holt had conducted a thorough review of AXA's UK operation since officially joining AXA in September.

The breathing space allowed Homer, who was paid over £230,000 per year, to explore new job opportunities before Holt brought in Hubbard. Homer, speaking from his home in Kenley, Surrey, said: "I already have some choices on the table. But I cannot talk about them until my gardening leave is up in three months time.

"Don't worry I'll be back," said Homer defiantly.

As Homer expects to take up a senior position in the industry, he confirmed he will not be resigning his post as deputy president of the Chartered Insurance Institute (CII). He added: "While on leave I will be arranging to hand over the chairmanship of the Motor Insurance Bureau."

When asked about the split, Homer said: "It's been amicable. Dennis is a professional."

Last month, Mark Adams chief executive of AXA's PPP healthcare business quit after three years in charge.

In September, AXA worldwide group chief executive Henri de Castries, commenting on the group's interim results, said that AXA UK had turned in an "unsatisfactory" performance. He added: "The contribution of the UK was not where we would like to see it in the long run, but we are going through a restructuring phase."

One analyst said: "Homer's been found out and found wanting. The Guardian Royal Exchange acquisition was an acquisition too far."

HSBC analyst David Hudson said: "The company has continued to produce poor results. The move doesn't surprise me."

Brokers and staff were shocked by the announcement. Biba chief executive Mike Williams said brokers would miss "a man you could do business with."

Stuart Alexander director Ian Ritchie said: "I'm as shocked as I was when Stuart Gray was sacked as manager of Southampton."

However, small brokers were less kind. Richard Mikula of Topaz Insurance Services said: "Homer was not in touch with what the company was doing. AXA has failed to be dynamic and has become the dinosaur of the industry".

It is understood that Hubbard has been appointed for his business integration experience, and specifically for his IT knowledge.

Andy Homer joined AXA three and a half years ago from Commercial Union where he had worked since 1971. In February 1999, AXA acquired Guardian Royal Exchange for £3.4bn. It was Homer's job to integrate GRE into AXA.

Homer, 48, said that he would be spending his gardening leave working on a three-acre wood he co-owns near his home, watching his home football team West Bromwich Albion and working with the CII on new strategies for the Foundation Insurance Test.