By Brian Fallow
WELLINGTON - Despite National Mutual's lacklustre performance, its French parent AXA has no intention of selling out, AXA executive chairman Claude Bebear said yesterday.
Au contraire. National Mutual is to be rebranded as AXA later this year. AXA would not be putting its name on a business it intended
to quit, said Mr Bebear.
He was equally emphatic that AXA was not sidelining National Mutual from its expansion strategy in Asia.
Mr Bebear, in Wellington yesterday as part of a 40-country tour of AXA outposts, took the opportunity to squelch Australian media reports that mutual dissatisfaction between National Mutual and its 51 per cent owner foreshadowed a parting of the ways.
"We have never said we were ready to sell out of National Mutual," he said.
Not that he is happy with National Mutual's performance.
AXA targets a 15 per cent return on equity. Globally it achieved 11 per cent in 1997 and 1998's results would be better, said Mr Bebear.
"But for National Mutual it is around 5 per cent, which is definitely too small. Both in Australia and New Zealand it is necessary to improve the return on equity and recapture market share."
That would involve cutting costs and improving the product range - AXA could help with the latter.
The rebranding would also help.
"There is a trend toward global branding in the financial services industry, so that you only have one name to support worldwide," Mr Bebear said.
"But there is another reason. What customers are looking for more and more is financial advisers, not the traditional life insurers. To rebrand is a way to say to the public we are no longer a traditional life insurance company but a financial services company, and the agents are becoming financial planners."
National Mutual will spend no more on the exercise than it normally spends on brand maintenance; the rest of the cost falls to AXA itself.
In addition, growth through acquisition, which has made AXA the giant it is today, remained an option in Australasia as well despite the failure of the MLC merger last year.
Mr Bebear reaffirmed his commitment to the "third pillar" approach, a commitment made to the Australian Government and National Mutual policyholders in 1995 when AXA bought in.
"It says National Mutual is the platform for entering the Asian market.
That means every time you make an investment in the Asian market you have to offer National Mutual to buy that business or part of it and to manage it."
The policy appeared to founder last year when AXA last received a licence to operate in China, a prize which had eluded National Mutual for years.
The Chinese gave the licence not to AXA but to France; the French Government offered it to AXA, which then found itself awkwardly placed between the French and Australian Governments.
National Mutual's "small" funds management operations in Hong Kong and Japan - $4 billion in funds under management - are being transferred to AXA Investment Management.
But at the same time AXA is selling its Singapore life insurance operation to National Mutual.
Asia remained central to AXA's strategy for National Mutual, Mr Bebear said.
Pictured: Axa executive chairman Claude Bebear. HERALD PICTURE / MARK MITCHELL
By Brian Fallow
WELLINGTON - Despite National Mutual's lacklustre performance, its French parent AXA has no intention of selling out, AXA executive chairman Claude Bebear said yesterday.
Au contraire. National Mutual is to be rebranded as AXA later this year. AXA would not be putting its name on a business it intended
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