AXA Health will stop writing new business in January after parent company Sun Life and Provincial Holdings (SLPH) said it was not commercially viable to run the operation alongside PPP healthcare.
Pundits believe the move towards an 100% backing of PPP represents the final nail in the coffin for Cardiff-based AXA Health after SLPH sold its Guardian Royal Exchange UK life, pensions and unit trust business for £759m to Aegon UK last year.
With an account valuation of less than £5m, a 1% share of the market and just six full-time members of staff, AXA Health was a tiny facet of the AXA Group – the majority shareholder in SLPH and one of the world’s leading insurance and asset management companies.
Tom Harvey, AXA Group head of communications, said AXA Health would continue to offer existing customers’ renewal terms and provide new business terms for group leavers.
However, despite stressing that existing business commitments would still be met, he admitted AXA Health was going through a process of “customer management by writing to policyholders and advising them to transfer to PPP healthcare”.
Jeoff Kitchen, AXA Health manager, added: “It is not commercially viable to operate two separate businesses in the UK. As a result, we have decided that the most efficient and cost-effective way to harness the strengths of our AXA Health and PPP healthcare operations is to concentrate on a single centre of excellence to be based at PPPs healthcare’s headquarters in Kent.”
AXA Health’s six staff members have since been found “other positions” at the AXA Group’s Cardiff base.
However, David Ross, spokesman for AXA Insurance, said the fate of AXA Health was far from sealed.
He said: “We have to look at things in context. This is not the thin end of the wedge or the beginning of the end for AXA Health. If you were involved with selling life insurance it would seem to be beneficial to all concerned if you could find a way to operate more efficiently.
“We still have customers with expectations who have bought products from AXA Health. We have not made a decision about the future of AXA Health and the review of our existing business is ongoing.”