After seven years at the helm of AXA, Peter Hubbard's rapid departure has left many shocked
Sources close to AXA’s recently departed chief say the move wouldn’t have come as a shock to Peter Hubbard.
After seven years at the helm of AXA, which resulted in the successful revamping of the company’s finances, Hubbard was also ready for a change, sources have said.
But one has to question if the speed in which his departure unfolded came as a bit of a surprise to Hubbard himself.
Last week he spent several days in Italy with markets managing director Mark Cliff, who, it recently emerged, will also be leaving AXA to join Fortis, and another member of the executive team for a management committee meeting.
When he returned to the office Friday, the news was announced that Hubbard’s time with AXA had come to an end and he would immediately be replaced by finance director Phillipe Maso Y Guell Rivet.
“No one had the foggiest idea this was coming,” said one senior member of AXA.
It was only a few months ago that Hubbard accepted an appointment to the board of the CII and spoke enthusiastically about 2008 being a key year to build on the industry’s level of professionalism. Others in the industry said they had been in the process of arranging meetings with Hubbard at next month’s Biba conference.
“[Brokers] had faith Hubbard would do what was needed to fix the problem. He had a history of such success.
So what led to the sudden urgency for change? Was it Hubbard’s decision to exit with haste or did it come from the top?
The industry seems perplexed. Some have questioned whether it’s merely coincidental that the departure so closely follows the company’s 2007 annual results.
But given the year’s weather-related challenges and catastrophes, AXA’s results were no worse than many of its competitors.
The company’s revenues in UK and Ireland general and health insurance increased by 8% to £3.5bn.
However, its commercial business grew by only 1.4% – in part, said Hubbard in an interview following the release of the results, to the company’s decision to sacrifice business in areas that were less profitable. Others said it may have come down to misinterpreting future market conditions when the company’s budget was drafted.
“He put forward an aggressive budget plan in December, heavily weighted on income and predicated on the belief that rates would harden,” said one senior market source.
An executive at a rival insurance company said: “AXA has been too cheap on premiums and too high on commissions. You need to have more money coming in then going out.”
“No one had the foggiest idea this was coming.
Source at Axa
Or perhaps it had to do with the ongoing complaints AXA was receiving about its service to brokers with problems ranging from inadequate resourcing, branch closures and communications nightmares?
Glitches with AXA’s IT system were resulting in severe backlogs and delays and inaccuracies in churning out quotes. But these were all issues that Hubbard said he was aggressively addressing.
He hired an outside company to clear away the backlogs, put 13,500 staff members through customer service training and migrated brokers to an automated office in Bolton in order to free up the branches to handle larger and more complicated relationships.
Even frustrated brokers themselves admitted they had faith Hubbard would do what was needed to fix the problem. He had a history of such success.
When Hubbard joined the fledging company in 2001 he immediately set upon a path of patching up the leaks and was credited by UK and Ireland group chief executive Nicolas Moreau as leading the company into becoming the fourth largest insurer in the UK.
He was also behind AXA’s momentous organic and acquisition fuelled growth that saw the company purchase brokers Stuart Alexander, Layton Blackham and Smart & Cook – now Venture Preference – which has become the second largest SME broker in the UK market.
The true reason for Hubbard’s departure may remain murky, with only the decision makers and Hubbard himself knowing the truth.
One thing that seems certain, however, is that we haven’t seen the last of Peter Hubbard.