Best known to John Bull brokers for being a little bit different from them, the AXA Insurance chief has taken bold steps to improve the company’s poor reputation on service, and to tackle commission and rates. Ellen Bennett met him.

“Have you been eating garlic at the Walbrook again?” quips a leading broker. It’s a typical market reference to Philippe Maso, the French chief executive of AXA Insurance, who is known for his fondness for a certain City member’s club. But while people might joke about Maso’s differences, it’s done with some affection – and, more importantly, a healthy degree of respect.

Since taking the helm at AXA in the wake of Peter Hubbard’s sudden departure seven months ago, Maso has proved a lot of people wrong.

He was initially seen as a short-term measure; a company man and former financial director who would slash costs, co-operate with head office and put those uppity London brokers in their place. But Maso has demonstrated that he is in it for the long term – and that he’s a force to be reckoned with. He is steering the company through a recession and has made some decisions that have shocked the market.

AXA continues to hold its own in a difficult market, reporting improved earnings in general and health insurance, up 36% to £244m last year. Gross written premium was down, however, from £2.19bn to £2.14bn. The French parent company is facing greater pain, with shares tumbling by 15% last week after Standard & Poor’s lowered its credit outlook to “negative” from “stable”. The change followed a cut in AXA’s dividend and a loss for the second half of 2008. The rating agency cited “weakened capital adequacy” and a possible drop in earnings as the reason for its decision.

Maso, sitting in his sparsely decorated City office, has his own problems to tackle.

“It was a big splash. People said, ‘Oh, this French guy has taken a broker on board’,” he says, referring to his decision to hire Paul Meehan, a big broker character who had sold his business to AXA, as head of customer experience. “But I didn’t see it as a brave decision.”

Meehan, who started last September, was handed the tricky job of sorting out AXA’s service. For those who don’t know – and there can’t be many – AXA has a terrible reputation for service. It has been ranked last in Newsquest Specialist Media’s league table of insurer service for two years running.

The appointment went down well. “It’s made a real difference,” muses one broker chief executive. “Paul has really been shaking things up there – and it shows that Maso means business.”

He certainly does. Beneath a self-deprecating sense of humour lies a will that executes such “brave” decisions fearlessly. Perhaps there’s even a touch of the Machiavelli here – it was been speculated that Meehan was really hired to use his outstanding contacts in the broker world to rebuild the insurer’s reputation.

Although that part of the business is run by Ant Middle, managing director of commercial lines, and Mike Keating, managing director of personal lines, Maso says: “I won’t deny there are instances where [Meehan] intervenes in his old capacity with huge efficiency. I think it’s about trust – when we come out and say something, these guys know that Paul has filtered it and that creates a level of confidence.”

Which must come in handy when you’re a foreigner, viewed with a degree of suspicion by those xenophobic Brits.

Employing Meehan isn’t Maso’s only bold move. He has taken a tough line on commissions and says he expects to drive them down by an average of five percentage points to the low 20s over the next three years. “We have reviewed commissions across our entire portfolio and taken a very pragmatic approach,” he says. Apparently the news has gone down better than expected with the brokers, but Maso admits: “If I go down into our branches, the guys will tell me these are bloody tough discussions to be having.”

He’s talking tough on managing general agencies (MGAs) too – and backed up his talk last month by withdrawing AXA’s capacity from Primary Group’s UK Underwriting because it failed to make a decent return. When he first took the job, Maso pledged to review AXA’s many MGAs and he has done so.

“I don’t believe the MGA model functions well,” he says emphatically. “We have put that transparently. In each of our relationships, we have said we are not fond of this model, but if you earn your fee there’s no problem. Our overarching message is that we are not going to grow these accounts – at best, we will maintain them, probably we will shrink them.”

Rates are on the hitlist too. “We are very vocal on this front and we are pleased with the progress we’ve made,” he says.

“Since the end of 2008, we have seen rates go up in the region of five points. This will go up to 10%.”

One broker gripe is AXA’s record for offering low rates to new business and hiking them up at renewal. Does Maso acknowledge this? He pauses for a long time, as he does with every tricky question put to him. “Yes is the short answer,” he says finally, going on to explain that it takes time to change a sales culture. Maso does answer all the questions, however uncomfortable.

So here’s another tricky one. What are his plans for Bluefin, the AXA broking arm formerly known as Venture Preference, and does the model of insurers owning brokers still make sense?

“If the question is, would you do it today, in the current economic climate, in the same way, the answer is clearly no,” he says.

Would he sell Bluefin? There’s another lengthy pause and a look of mute appeal before he answers: “For an enormous value, I probably would consider it.” It’s a big admission. He does go on to emphasise, however, that his preferred option would be to press ahead with AXA’s plans for the business, led by chief executive Stuart Reid, even though its acquisition ambitions have been mothballed in the recession.

From all this, it should be clear that Maso has been making waves. “The market’s respect for him is growing by the day,” says one broker – and this despite the fact that he could not be more different from his predecessor, Peter Hubbard.

“I come from a different background, a different environment, a different country,” says Maso, the truth of his words evident in his accent. He admits that he was initially viewed with suspicion by British brokers. “But after a while people discovered I know this market well. I have no intention to resign after a year, job done.”

In fact, Maso is excited about the future and unusually buoyant about the economy. As AIG sinks to its knees and the recession rumbles on, Maso keeps smiling and insists it will be over sooner than people think. Meanwhile, he is positioning AXA as a premium brand.

Under his leadership, the insurer is turning around its reputation for service and, with a couple of its peers, leading the market on rates and commissions. Maso is also an engaging presence, bringing a different personality and a touch of class to a market packed with clones. So, who’s for garlic at the Walbrook?