Axa UK deputy chief executive Paul Evans has suggested that other life companies may look to emulate the type of deal the firm has made with Friends Provident as he says it is increasingly difficult for firms to be good at everything.
Evans insists there is no scope for further disposals in the businesses retained by Axa as part of the transaction and is adamant that adviser business Bluefin will be kept.
He says: “We have been very careful to shape a transaction with Friends Provident which met their needs because they wanted to consolidate protection, group pensions, annuities and more traditional life business.
“We wanted an RDR-facing wealth management business with a direct protection business – the portfolio that we retained is exactly what we wanted. There are absolutely no plans for any further rationalisation.”
Evans insists Axa is committed to UK business. He says: “We are retaining more than half of revenues and of our new business profits. The scale of the business we are retaining is substantial in its own right.”
Axa’s wealth management arm, including Architas, the Elevate wrap, Axa Isle of Man and the Axa Winterthur Wealth Management specialist pensions and investment operations, are not part of the deal. The acquisition also excludes Bluefin, Axa’s health and general insurance businesses and Axa Investment Managers.
Evans says: “Axa is focused on ensuring we are successful and supported to achieve that success by whatever investment we need to lead the market in that segment. Axa’s commitment to us is absolute and resolute.
He says there will not be significant job losses at Axa as part of the transaction after around 2,000 staff transfer to Friends, although he says there may need to be some “tidying up” in support services such as human resources and finance.
Evans says Axa Elevate has not scrapped plans to go into the corporate wrap area, even though the team working on the project will transfer to Friends. He says this is something that will be kept in mind for the future but it is not a priority in the near term.
He does not rule out acquisitions but the Friends’ deal is the main priority at present.
Evans says: “I do not think I will rush into any acquisitions. I have got quite a complicated separation to complete but we will always keep an eye on opportunities to accelerate our growth or to realise synergies.”
Evans says the Friends/ Axa deal could influence the thinking of other life offices.
He says: “Other businesses are looking increasingly at how they generate cash and release capital. I am sure others will be looking at ourtransaction and considering their own future models. Can they be waterfront providers? Can they do everything or do they need to focus the capital they deploy? I am not saying this is going to lead to lots of other similar transactions but I am sure people will look with interest at what we have done here. We are now a very focused business without any legacy of the past.”