AXA chief blames regulation and GRE debt for UK underperformance

AXA chief executive Henri de Castries has blamed the UK's financial regulations and the legacy AXA inherited from Guardian Royal Exchange (GRE) for the recent underperformance of AXA UK.

Speaking at the AXA University in Bordeaux, de Castries singled out the UK general insurance and life divisions as the two most problematic areas in the British business.

He said UK regulation threatened to "kill" the UK insurance industry. "Ten years ago UK insurers were on top. The Brits have destroyed their own industry."

But he added that the industry was pragmatic and would recover from any damage inflicted by regulation.

On GRE he added: "General insurance is starting to make some money but we inherited a very bad business with GRE. It was almost bankrupt."

In a sign that the UK business is posting further improvements, executive vice president of transversal operations, communications and human resources Claude Brunet said that the combined ratio of the UK general insurance business would fall below 100% before the end of 2004.

On offshoring, de Castries said he expected the AXA India operation to grow to 3,000 employees by next year.

De Castries said the decision to move more jobs offshore was a commercial rather than an emotional one.

"In England if we had not done it, we would have had to close certain divisions," he added.

De Castries said the company was looking at both Morocco and China as future offshoring centres.