In A world dominated by merger and acquisition activity, rule number one for any company going through an integration process is not to antagonise or alienate its customers.
For an insurance company, an important set of customers will be its intermediaries, so putting broker relations near the top of the integration agenda will always be a wise move.
Axa Insurance is no exception and during its year-long integration with Guardian Royal Exchange, much work was done behind the scenes to ensure that it was moving in the same direction as its intermediaries.
Amanda Fisher, regional director at Axa, has been at the centre of the process. An ex-CGU employer, she arrived from Ernst & Young last year to take on a new initiative launched for brokers, by the company, called Premier Partners.
“When the new company was launched in September I got my sleeves rolled up,” she says. “The UK regions for Axa are split into London, the south and the north and my job was to look after the north. In this region there are eight branch offices and my first job was to get the branches sorted out.
“In most there was a 70% ex-Guardian to 30% Axa staff split so as you can imagine there were huge integration issues. But saying that,
the percentage was actually a good one considering how much bigger Guardian was in the UK than Axa.”
New strategy
One of the biggest problems was that both companies dealt with different brokers, so a new strategy was inevitable. This was when the Premier Partners initiative came into being.
Fisher says: “Axa's Premier Partners is about us getting close to our best intermediaries so that they will be around for five, ten or maybe even 15 years.
“We are not a club nor are we a menu of services. We are quite bespoke because what we are trying to do is work together with our brokers in a way that suits us both.”
Axa has gradually built up 130 to 140 partners and Fisher stresses that they each chose each other. “I would not be so arrogant as to say that we chose them,” she says.
She is also keen to point out that the company is seeking different relationships with different brokers and it would still work with brokers who were not Premier Partners.
“There is still a strong relationship there with non-partner intermediaries and what the premier partner gets is not service-related. It's just that we can't be all things to all men.”
So what sort of company makes a Premier Partner? “We know which brokers, in terms of revenue in the top 200, we want to deal with. Of the ones we work with, we would like to have 15% of their books of business. This is a long- term objective.”
Net not threat
A lot of what Axa has done with its Premier Partner intermediaries so far is not about achieving results today – but is part of a longer term plan. For example, Fisher organised a series of strategic away days in the early stage of the integration process so the company could talk to the brokers about each other's business.
“Axa might not get anything today but it helps to understand each other,” she says. “We looked at each other's business plans to understand how we can work together and then hopefully revenue will flow.”
Issues Axa is addressing with intermediaries include looking to see if there are niches that could be cultivated, or segments of their business that could be developed. Axa will also look at how they handle personal lines and successive issues.
“Training is also a good example of how a intermediaries can make improvements,” she says. “They can piggyback on our training resources or we can get them in touch with an external trainer.
“What we are offering, I think, is unique. We have 1,400 employees, a PR function, a human resources function and other partners that they – our Premier Partner brokers – can tap into.”
Fisher says the company is also keen to talk though industry issues with its brokers so that they know Axa's position. She says one of the main areas of concern has been the internet. “There is not the same solution for each company. But a lot will have wrong perception of internet selling. What they need to do is look at the technology available and use it to streamline their business and cut back on overheads, instead of seeing it as a threat.”
Positive feedback
Surprisingly one issue that has not reared its head with the company has been the contentious issue of dual pricing.
She comments: “I know that dual pricing is causing a lot of debate, but during our road shows we sat down with our brokers and this issue was not raised Axa needs various levels of distribution and we need the direct arm to compete with other direct writers.”
One of the most important points when dealing with both their Premier Partner intermediaries and other intermediaries, Fisher realises, is that during an integration process a company needs to set realistic targets in its programme. Because if you can deliver them you have more standing.
She adds: “In October last year we got some feedback and found that we had got the basic stuff right. Getting your service right is very important, Until you deliver what you say you will, you don't get credibility from intermediaries.
“We didn't want to go out and over-promise, so we listened instead. Service is critical because at the end of the day if this goes wrong this is what costs them money.”
