It’s been a turbulent time for AXA, as UK chief Philippe Maso departs and a new team seeks a way to turn around its service and trading record. Could this be the start of a new era for the firm?

“I’m not the sort of guy who moves in the middle of a race,” Philippe Maso told Insurance Times in June. “I have no intention of moving – I’m in, and it’s important the market knows it.”

Little more than three months later and AXA’s UK chief executive Maso is on his way out. After the sale of AXA’s life business resulted in a management overhaul, Maso – weakened by

the insurer’s falling premiums and continuing poor service – failed to win the support of the broker market.

‘On the horns of a dilemma’

The seeds were sown when Maso first moved into the job. He took over from Peter Hubbard in May 2008, when trading conditions were brutal during the worst recession for 70 years. AXA’s finances were on the slide, its UK and Ireland revenues plunging from £5.1bn in 2007 to £3.97bn in 2009, and its underlying earnings plummeting from £311m to £127m.

The firm was also dogged by a reputation for poor service, though on this Maso took quick action. He shocked the market by appointing Paul Meehan as customer experience director. Meehan already had some history with AXA, having sold his broking business, Smart & Cook, to the insurer in 2007. His remit was to bang heads together to reverse consistent poor service.

“Maso was on the horns of a dilemma. He inherited a business that wasn’t making money and the service wasn’t sorted out,” recalls one source.

This wasn’t the only issue to demand the charismatic Frenchman’s attention. In 2008 he joined his opposite number, Igal Mayer, at Aviva – then Norwich Union – in a bid to shatter the power of the consolidators. These broking beasts held total sway in the market, demanding eye-watering commissions even as rates were in the doldrums.

At the same time, managing general agencies (MGAs) were raking in big money and usurping insurers from the value chain. Maso and Mayer were determined to put a stop to both.

They failed. The rest of the market refused to follow suit on rates, and both Aviva and AXA lost tens of millions from their premium base. In Aviva’s case, it lost £1.1bn in 2009.

As for the public and increasingly bloody fights with the consolidators, Aviva blinked first. In October 2009, it was suddenly announced that Mayer was returning to his native Canada and that well-liked life boss Mark Hodges would be taking the reins at Aviva.

As one broker explains: “If you come in and take on the market, unless you do it with a lot of trading knowhow, you’ll just see business go away from you. In Philippe Maso’s and Igal Mayer’s time, the beneficiaries have been RSA, QBE and Allianz.

“Philippe may have been right, but you hand advantage to other traders. And, like Igal Mayer, he’s discovered that the UK market and the UK broker market is a tough one to manage.”

Out on a limb

Although Maso was still standing, his had become a lonely voice. While he maintained his stance on MGAs, the rest of the market watched them flourish. And while his relations with the bigger brokers never reached the same lows as Mayer’s, he didn’t win the support of the market.

AXA lost 18% of its commercial lines premium income this year as a result of exits from MGAs, most notably the withdrawal from Primary last year.

Brokers also felt there was no consistency in the the firm’s trading. Before Maso arrived, commercial boss Mark Cliff, an experienced leader who could talk the brokers' language, had left to join Fortis as managing director.

Maso quickly moved to fill the gap by appointing Ant Middle. But although Middle was well respected, he didn’t have the depth of Cliff's relationships and was hamstrung by his boss’s distribution policy. Middle decamped to join Aviva in August. And Maso further weakened his position by failing to appoint a replacement, drawing criticism from a market weary of prevarication.

“I think if you have a chief executive and team that are good at trading, you can trade through difficulties, but when Mark Cliff left there was no one doing trading,” says the broker. “You look at Allianz and they've got people such as Chris Hanks; RSA has Paul Donaldson. What AXA has lacked in commercial lines is a trading leader."

The final blow for Maso came with a management overhaul in August, resulting in the promotion of life boss Paul Evans above Maso and the return of group boss Nicolas Moreau to Paris. The group was restructuring itself following the sale of AXA’s UK life business to consolidation vehicle Resolution in June. Evans finally took up the reins as UK chief executive on 1 October.

All change

Days later, Maso was out of the door, leaving Evans in charge and the general insurance business, now split into two, reporting direct to him.

Steve Hardy, managing director of AXA Direct, has taken over the new role of chief executive personal lines, reporting directly to Evans, and joins the AXA UK executive committee. John O'Neill, chief executive of AXA Ireland, has taken responsibility for setting up the new business structure and will lead the commercial lines team while a chief executive is recruited.

In public, the AXA team is putting a brave face on the situation. Hardy maintains that the life sale and subsequent restructure is the reason for Maso’s departure. “We want to be flexible and agile and get to our markets quickly. To do that, we had to look at the corporate governance structure and the best way was to set up a governance structure at UK level,” Hardy told Insurance Times.

Sources tell a different story. One industry commentator believes Evans is keen to stamp his authority on the insurer and this, combined with disappointing results, has resulted in Maso’s exit. Others say Evans and Maso were not close.

“It’s obvious the results themselves would have had some impact, as well as Paul Evans coming in as a new chief executive wanting to put his own stamp on the business. Paul wants to do things his way. He feels Philippe and the structure currently in place aren’t right. You have to applaud Paul Evans for making his mark so quickly.”

Maso also deserves some credit. There is a general acceptance that AXA’s customer services standards are improving, while others say he left a shrunken commercial business well positioned for growth. Personal lines is benefiting from increases in motor rates, helped by good revenues from Swiftcover and AXA Direct. So far both have avoided the heavy losses of bodily injury claims.

As to AXA’s future, many questions remain. The new appointees must quickly get their heads around what to do with the insurer’s broker arm, Bluefin. Is it a valuable route to market or a distraction that should be sold? And what happens to Paul Meehan, formerly tipped for the commercial lines job, now that his biggest supporter is gone?

The first job for Evans and his new team will be to put AXA on the map after three years of disappointing results. The waiting game is surely over. Now is the time to take off the gloves and fight, Aviva-style, for growth. IT