Swiftcover success rejuvenates Axa's personal lines business

Axa Insurance has seen the size of its personal lines business overtake its commercial lines portfolio on the back of Swiftcover's growth and shedding the unprofitable parts of its small and medium-sized enterprise (SME) book.

While the commercial arm's gross written premium fell by £61m to £1.04bn, its personal lines business rose from £1.08bn to £1.1bn, which includes a £47m improvement in household revenues and a 49% increase in Swiftcover policies to 522,000.

Axa Insurance chief executive Philippe Maso said he was "quite satisfied" with the 2008 result even if it was not totally in sync with what happened last year as the 2008 figures reflected what actually started 18 months ago.

Mr Maso said: "The personal lines business has been rejuvenated on the back of dramatic growth on the direct side under the Swiftcover banner. We are now interested in launching an Axa-branded motor product in the same vein during 2009.

"At the same time you are likely to see Swiftcover launch a complementary range of products to match those available under the Axa Direct brand, namely household and travel."

Mr Maso was satisfied Swiftcover's growth had been achieved with a profitable combined operating ratio of "around 100%", which is below the break-even point. He said he expected that in 2009 it would reach a similar point across the whole personal lines business, both direct and broker.

Explaining the dip in commercial gross written premium, Mr Maso said: "The growth at Axa over the last two to three years has been based on what I would describe as not the most healthy relationships. We are reviewing these and cleansing our portfolio to remove those which have lost us money."

Mr Maso said Axa would put through rate increases of between 8-10% across its whole commercial portfolio.

Overall, Axa UK and Ireland reported a 19% drop in profits across its life, savings, healthcare and general insurance businesses to £288m. The general insurance and health arm's profit improved 36% to £244m.