Compensation culture remains a challenge for insurers, says Axa UK’s Blanc

Amanda Blanc

  • Axa working with ABI to keep compensation culture on the agenda
  • Axa UK saw general insurance and healthcare revenues rise by 7% to £2.2bn
  • Blanc highlighted growth in the broker personal lines business as a "point of pressure"

The compensation culture is still dogging the UK insurance industry and so the market must continue to price for it, according to Axa UK CEO Amanda Blanc.

Speaking to Post, Blanc (pictured) said: "We have not seen the compensation culture reduce as much as we would like. This has not been addressed and so we will still need to price for that.

"The previous government had committed to addressing the compensation issue and we are working with the Association of British Insurers to keep this on the agenda and ensure this issue is addressed."

And she said the market continues to push through rate increases: "We are definitely still seeing [premium rate rises] in motor - more in retail than commercial. We have seen that through the ABI stats. We are seeing good rates and those need to come through. There is an increase in home but that is in the single digits."

In its results for the first half of 2016, Axa UK saw general insurance and healthcare revenues rise by 7% to £2.2bn (2015: £2.1bn), with 7% growth in UK personal direct motor, 3% growth in healthcare and 11% growth in commercial lines.

Underwriting profitability from GI and healthcare activities, measured by combined operating ratio, was broadly consistent at 98.2% (2015: 97.9%), while there was a £20m year-on-year uplift in underwriting results.

Blanc said: "Overall we are really pleased with the very strong set of results. The key highlights for me have been good growth in almost every area. The health book is performing very well - it is growing and innovating. The retail direct business is performing very strongly and that has been a turnaround. This has gone from strength to strength and has the potential to get even stronger.

"Also, from a customer perspective, we are in a good place. All our work on transparency has been well received."

The group also posted its H1 results today, which Axa global CEO Thomas Buberl said were solid despite 'headwinds'.

For the UK and Ireland business, Blanc highlighted growth in the broker personal lines business as a "point of pressure", adding: "We didn't invest in this in the same way as we did in direct motor four or five years ago, so this will take a few more years to develop."

However, she denied this was a death knell for personal lines broking, adding: "We are investing in technical pricing sophistication here. It's 5% of the book - a small but important part. When you reflect on the performance of both sides of the business, it is a significant difference in growth but it's an area we are working on."

Blanc also highlighted travel as an area that is experiencing uncertainty: "There has been a sequence of events this year for that sector from terrorism to the collapse of low cost holidays and that is likely to impact that business."

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