AXA keeps loss ratio flat despite liability claim woes

AXA’s 12-month loss ratio to March was flat at 54.2%, although employers’ liability was a thorn in the side of what was otherwise a “very good” result, the company has revealed in a strategy update.

Commercial claims and underwriting director David Williams said that employers’ liability claims losses were “bad” industry-wide. He said employees were more likely to make a claim when the economy was sluggish.

Williams also believes the Ministry of Justice portal has made motor personal injury less lucrative for lawyers and they are now moving into employers’ liability.
Carrying rate increases was challenging, Williams added, as it would largely depend on the rest of the market and broker sentiment. In commercial motor, he said AXA was making an underwriting profit.

Williams said AXA was benefiting from not having tried to compensate for losses with ancillary income, such as referral fees, now being banned.

AXA commercial chief executive Amanda Blanc said the result was good. “Loss ratio has never been the problem, other than the MGA problem. [AXA’s problem] had been on expenses and commission rates, but now we are in a good place.”

Blanc said she was confident AXA Commercial could achieve targets to grow the book to £400m by 2015, concentrating on its core SME market.