Watching the bottom line

Two weeks have passed since Laurent Matras joined Groupama Insurances as managing director, and he has enthusiastically taken up the company mantra – focus on the bottom line.

The 39-year-old, who joins Groupama from AXA as second-in-command to chief executive François-Xavier Boisseau, says it is too soon to provide specific strategies. “Obviously after only a few weeks it’s a bit difficult,” he says. “I spent the first few weeks just meeting people, primarily my team and talking to the execs.”

It is Monday afternoon and in his City-based office, Matras is wearing a fine chalk stripe suit with a bright blue tie and blue shirt, sans cuff links. He is an earnest, softly spoken but does not mince his words.

Initially, his focus will be on the commercial and personal lines businesses. He will have day-to day responsibility for putting the company’s strategy into action and play a leading role fulfilling its plans for the business. Although he sees no gaps in the products Groupama offers, he will be scouting for new markets.

He is also responsible for the strategic direction of Groupama Healthcare, which, along with commercial lines, will be a difficult area to achieve strong bottom-line performance due to the flat market.

But he remains an optimist: “Rates have to go up at some point, especially on the casualty side. And claims inflation on the injury side is still very high. So there will be an adjustment,” he says.

He is particularly keen to build closer relationships with brokers, and is confident that Groupama’s smaller size and non-hierarchical structure will enable it to be quicker and more agile than the competition when it comes to offering brokers what they need.

Matras will be familiar to many in the market, having served as finance director for AXA PPP healthcare, as well as for AXA Insurance UK. Until 1999 he was a financial analyst for the group corporate finance team in Paris before moving to the UK as head of actuarial at AXA Insurance. He was named head of personal lines underwriting in 2002 before becoming finance director in 2005.

Additionally, he was a member of the executive committee and management board and was responsible for 300 people in business finance and strategy, planning, business development, and mergers and acquisitions.

Matras says he had several reasons for joining Groupama, the first being the chance to work again with Boisseau, who is a fellow AXA alumni. “We got on really well; the chemistry is really good between us. He’s very straight, very up-front, and very clear,” he says.

At the time of Matras’s appointment, Boisseau said: “I am delighted to link up with Matras again. His skills and experience will bring much to the group and his strategic insight will offer a valuable new dimension to our executive team.”

Matras is also eager to build on his experience as finance director at AXA in a job with wider-ranging, but also more in-depth, responsibility.

“Groupama is not one of the top four players in healthcare and that is an area we are planning to address.

Laurent Matras

His departure from AXA was followed last week by that of AXA chief executive Peter Hubbard and markets managing director Mark Cliff.

Fresh from a company seminar in Normandy, Matras is quickly learning the fundamentals, though he remains reluctant to be drawn on the details. But it is clear that his background in healthcare should prove useful.

“Groupama is not one of the top four players in healthcare and that’s an area we’re planning to address,” he says. “It’s not one of the big names in the market. It’s very difficult just to sell on service; you have to have a name, to an extent.”

Groupama’s healthcare division is targeted at the UK’s small business community, trading only through specialist private medical insurance (PMI) and healthcare brokers. Since the integration of the Clinicare business in late 2005, there has been ongoing portfolio juggling to manage non-target and loss-making business.

Clinicare has been the one loss-making part of Groupama, posting annual revenues for 2007 of £82.3m, down from £95.7m in 2006. But overall, the insurer recorded its fifth straight year of profits in 2007 – albeit, with pre-tax profit dropping to £23.1m from £33.8m the previous year, attributed to storm and flood losses.

It is possible that the web-based revamp of the healthcare side’s administration that is underway could improve efficiency and therefore profitability.

Boisseau has said the company could also look to distribute its PMI product through its broker Lark, which does not currently offer a PMI product underwritten by Groupama. He was candid about the company’s broker acquisition strategy, which is aimed at helping it overcome its struggle to grow its commercial lines business.

Commercial lines revenues lifted slightly in 2007 with premium income rising to £104.7m including fleets against £101.8m in 2006. Personal lines grew by 3.6% to £221.7m versus £213.9m the previous year.

Personal lines brokers are another important part of the insurer’s distribution plans, and Groupama is looking in particular for businesses that operate within niche markets. Last year, the company bought motorcycle broker Carole Nash.

That is bound to grab the attention of Matras, as he owns two motorcycles – a Yamaha and a KTM. The KTM is back in France, where he maintains a farmhouse near Toulouse.

He welcomes the challenge of his new role and his new team, which he says has a lot of energy, pride and professionalism. “Groupama is a relatively small but dynamic company and to an extent, punching above its weight, which is always good,” he says. The challenge for Matras now is to keep growing that bottom line.