Personality is key at the French insurer, as it seeks to put its troubled past behind it
Take a look inside the AXA empire. You’ll see UK chief executive Philippe Maso, personal lines director Mike Keating, customer service director Paul Meehan, claims boss David Williams, Bluefin chief executive Stuart Reid and his right-hand man Graham Coates. Then there is group boss Nicolas Moreau. That’s the AXA family: and there are interesting times ahead for them.
At the Biba conference in June, the talk of the town was Moreau’s rumoured departure – and potential implications for Maso. As it transpired, both have stayed in post, but things are changing fast at the insurer, which is in talks to sell its UK life business. As revealed by insurancetimes.co.uk last week, Moreau's departure is still very much on the cards, despite AXA's strenuous denials, with current life boss Paul Evans tipped to take over.
With commercial MD Ant Middle out the door and off to rival Aviva, the next raft of appointments will be key. But what has led to the dramas within the French insurer as it continues on its tumultuous two-year journey of change and repair? And how do all these personalities fit together?
The story has its origins in AXA’s broker relationships some three years ago, headed by Hubbard and his number Mark Cliff, now at Fortis. “In the old days, we dealt with Mark Cliff as the broker’s main contact. He was someone who had his own way of doing things and was very successful,” explains a broker who worked closely with the insurer. “But we all found the AXA approach a little arrogant and aggressive and there was a lot of cynicism directed towards the overall culture and service levels.
"And on top of all that, everyone was pissed off with the service they were receiving from the AXA team day to day.”
Not surprisingly given this level of dissatisfaction, the AXA management team changed. In April 2008, Philippe Maso took the helm from Peter Hubbard and put Ant Middle in to run the commercial lines business.
The head of a top 10 broker continues the story: “Ant is a nice bloke, more conciliatory than Mark but not seen as being as dynamic, although he is tough and fair all the same. We basically told Ant our problems and the fact we had put AXA at the bottom of our supplier lists and then indicated to him that AXA needed to demonstrate improvements right across the park in order to make headway with our relationship. And, in fairness, they’ve done exactly that to an extent.”
New world order
Against the backdrop of AXA’s global ‘redefining standards’ campaign, Maso introduced new tactics and key people in a bid to overhaul AXA and shed its tarnished reputation. His boldest move was to employ broking entrepreneur Paul Meehan as the company’s customer service experience director, with a remit to sort out AXA’s poor claims service.
But was there more to the appointment than met the eye? Meehan was no stranger to AXA, having sold his broking business Smart & Cook to the insurer in 2007. He then served a brief stint at co-chief executive of AXA’s broking business, made up of Smart & Cook and other acquisitions, before losing out on the top job to Stuart Reid at the end of 2008. This came as a surprise to the market, which saw Reid’s appointment as Hubbard’s decision.
Then, Hubbard departed, Maso took over and all of a sudden Meehan was back, albeit in a non-broking role. Rumours were rife that he could not resist interfering with broker partnerships, to Middle’s chagrin. As one source put it: “Paul is not exactly ‘Mr AXA Corporate’ – he comes from a background of running his own show for many years, so who could blame him?”
The source continues: “But Maso has him there as an additional pair of eyes and ears to fix broker problems, and the perception is that Paul believes he is Maso’s number two. One would imagine that in order to maintain momentum and create change in the business, the Meehan dynamic really works for Maso. Either that or he hasn’t got a clue what’s really going on.”
The situation has not won many fans internally. The source adds: “When you’re already dealing with a set of brokers who all have some sensitive problems that need fixing, the fact that some feel they can just pick the phone up to Paul Meehan and bypass the existing structure can be seen as undermining the team.”
Man with a plan
An AXA insider counters the negativity, claiming any change entails conflict, particularly when it involves a number of strong characters working together. He insists the business is heading in the right direction. “All our internal service indicators are showing green lights. Our service has improved, the morale has improved and the leadership is clear and frank with the senior team.
"The game is how we join up all the expertise and bring it all altogether. Now the life business is being sold off, the focus will be on the general business, clients and growth.”
The source continues: “The feeling here is that Maso has a plan, even if certain consolidators have it in for him and rumours have been flying around the market that he too is leaving. But Maso won’t be bullied out of his job in the same way that Igal Mayer was at Aviva. He won’t be bullied by the consolidators just because he is foreign and does things differently and because he doesn’t fit in with the English City boy humour and banter.”
For his part, Maso told Insurance Times that he doesn’t have any intention to leave AXA or the UK, saying: “I have been two years in this role. In two years you don’t harvest the fruits of your action. I’m not the sort of guy who moves in the middle of a race.”
So what of the future? Insurance companies are slow to move, and change takes at least two years to bear fruit. In the first quarter of 2010, AXA’s financials have begun to improve, but it is still suffering the same kind of pain with certain deals and relationships that Aviva did in 2009. But the signs are there that the Maso/Meehan partnership is beginning to turn the company around. They will not want to lose that momentum.
The question of the company’s future direction has been brought sharply into focus by Middle’s departure. Maso has indicated that he will take his time to replace the affable front man. But whether Meehan takes the chair remains to be seen. Certainly Mike Keating, who has commercial experience, would provide a safe pair of hands. And Middle’s deputy Keith Hector is thought to want the job.
Then there is the Bluefin and Stuart Reid dynamic. Despite AXA’s statement to the contrary, rumours that Bluefin may be shelved off either via a trade sale or to its management still circle the business. Observers point out that AXA does not obtain much benefit from owning the broker because of regulatory conflicts and changes in the market since the acquisitions in 2007.
Mischievous observers also point to such a move freeing up Stuart Reid for a two-year corporate insurer project that he wouldn’t resist for the right price tag. But it would be more likely that Reid would front an MBO of Bluefin if it were up for sale.
If Maso can keep the management team happy, the plates spinning and everyone focused on their strengths to deliver the goods, relationships and business, then there is no reason why AXA cannot turn it around by mid 2011, under new leadership at the group level. But the appointment of a replacement for Ant Middle will be critical, and not just because Maso needs to ensure he has the right person for the job. He needs to manage the impact caused by whoever does secure the position. IT