Insurance firm Axa delivers ‘strong’ set of half year results
- Credit: Archant
Insurance firm Axa UK and Ireland has produced a strong set of half year results, despite a “challenging” economic environment.
The company, which employs about 1,000 people at its main claims centre at Ipswich and a further 200 staff at Haverhill, dealing mainly with household claims, said it had seen growth and profitability across its insurance and healthcare departments.
Underlying earnings rose by 8% to £138m compared to £128m last year, while general insurance and healthcare revenues were up 7% to £2.2bn. It saw 8% growth in its UK personal director motor sector, a 3% rise in healthcare and 11% increase in commercial lines.
Its ‘personal direct’ operations had benefited from “technical excellence”, with direct motor showing a £18m increase in revenue and improved profitability, it said.
“This performance has been supported by AXA’s ongoing programme to deliver greater transparency to customers across the business – publishing claims decline rates by product line, bringing greater transparency to policy coverage and Axa remains the only insurer to clearly show customers their previous year’s premium at renewal,” it added.
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The healthcare business increased its revenue to £766m on a comparable basis following the successful acquisition and integration of Simplyhealth in the second half of last year.
Its commercial lines business, which was recently voted Commercial Lines Insurer of the Year, had delivered its revenue increase “in a highly competitive market”, it said, in part as a result of diversifying into larger, mid-market risks.
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Chief executive Amanda Blanc, described them as a “very strong” set of results in a challenging macro economic environment.
“Although we continue to deliver improved underwriting profitability, we are facing into some strong headwinds with deteriorating investment returns, rising claims costs across all motor classes and a challenging personal lines broker market.
“As such, we must focus on the factors that we can influence,” she warned.
“The significant increase in motor repair costs, particularly at the higher end, is adding further pressure in a sector that is already blighted by compensation culture. The impact of spurious whiplash claims and the activity of claims management companies already place intense inflationary pressure on motor premiums and we continue to work with the Government and the wider industry to combat this.”
The company also faced pressure in the intermediated personal lines market.
“Profitability in this sector, particularly motor, remains challenging and stands in stark contrast to the performance of our direct motor book which continues to go from strength to strength,” she said.
“This performance is driven by a significant and continued investment in digital and data which allows us to deliver an intuitive and customer-focused offering. The ability to react to and act upon rapidly changing customer demands will continue to be the defining factor in personal lines and this is the challenge that faces brokers and insurers operating in this market.
“So although I am satisfied with these results and confident that we can maintain this trajectory to the year end, we are acutely aware that external forces continue to pose a threat and we will continue to review our position on an ongoing basis.”
The Axa Group employs more than 10,500 people in the UK, and 166,000 staff worldwide, serving 103m clients in 64 countries.