Hubbard refuses to deny acquisition rumours

AXA has stayed tight-lipped over rumours that it is in talks to buy NIG from the Royal Bank of Scotland.

AXA chief executive Peter Hubbard refused to deny rumours that the insurer is in talks to buy NIG. "I'm not going to comment on it," Hubbard said.

Royal Bank of Scotland (RBOS) group chief executive Fred Goodwin has denied that NIG, which RBOS acquired in its acquisition of Churchill, is for sale, but rumours persist that the two companies are in talks.

Hubbard said small and medium sized enterprises (SMEs) business, in which NIG specialises, was key to the success of AXA's commercial lines growth, which saw its combined ratio for UK property and casualty (P&C) improve to 102.4% in its first half results.

"It's pretty much dominated by SMEs," Hubbard said. "That's where our strategy's been. It is actually now starting to look like its getting towards the pack. There's still some way to go but it's going in the right direction."

Revenues in the UK P&C business increased 5% to £1.5bn, with commercial premiums up 19%. But personal premiums fell 8%, affected by AXA's joint venture with RAC.

"We knew our premium was going to fall from our relationship with the RAC," Hubbard said. "We did the RAC deal [which saw AXA become the driver support company's broker] because it was beneficial to profit."

In personal lines, household rose 3%, travel was flat and motor fell 24%.

The combined ratio of AXA Insurance (which includes its UK P&C, healthcare and Ireland), fell from 111.6% to 109.1%.

Hubbard said that taking out ongoing investment, the underlying combined ratio [when the £100m First Choice investment is excluded] of 104.8% meant the company is on track to deliver its target of 104% by 2004.

AXA also announced the promotion of Kevin Sinclair to the new role of marketing and underwriting director. Hubbard said Sinclair, who previously looked after AXA's personal lines intermediaries, will oversee pricing, product management and marketing.