AXA achieves four of its five goals

Rob Hosking

Wednesday 25th February 2004

Axa has achieved four out of five of its K5 performance goals in the teeth of an equity market downturn in the first part of last year.

The targets for the company's Australian and New Zealand operation were: doubling the value of new business, be in the top five of net retail fund flows, reduce management expense ratios by 50%, reach top quartile in the major adviser surveys of service standards, and reach top quartile in Axa's global employee satisfaction survey.

Both the Australian and New Zealand operations achieved four of the five, but the differed in the target each missed. The New Zealand operation missed out on the funds flow target, with net outflows of $45.4 million for the year to December.

However, a positive side of the New Zealand operation was that the Spicers business had "a good year in a difficult market," says chief financial office Andy Penn.

Spicers had a positive funds flow of $13.3 million by the years' end.

That figure though exemplified the whole operation - the first half of the year saw a net loss, but that was turned around in the last six months of 2003.

Overall wealth management business in New Zealand was down 9% for the year. However, Axa cites industry data from Morningstar and other researchers to the effect that the company has grown market share within New Zealand.

The difficult income protection part of the company's insurance business has returned to profitability. The whole industry faced strong criticism late last year in a Harvest Partners report that warned that insurers in New Zealand were competing too much on price and that much of the income protection policies being written were unprofitable.

Axa says that report - which followed a similar warning from Harvest in Australia several years ago - was a useful wake up call for the industry.

Comments from our readers

No comments yet