New faces at the top help Axa Asia Pacific find its way

RICHARD BRADDELL meets the chief executive of a leading insurance company that is determined to focus on strong revenue growth.

MELBOURNE - After his first year with Axa Asia Pacific, chief executive Les Owen can look at a performance that is moving in the right direction.

It may not be earth-shattering, but it suggests the ground has been well laid in turning around a company that 18 months ago showed all the signs of having lost its way.

Mr Owen concedes Axa Asia Pacific has underperformed before and in the five years since French-based Axa took control.

The once-proud number two to AMP in the Australian and New Zealand markets now has assets under management and administration of just $A40 billion ($59.7 billion), or only about twice the size of Tower's, having lost considerable ground in superannuation and investment.

But the company can still claim leadership in some markets in Australia - risk insurance, for instance, although market share is diminishing.

Mr Owen, who arrived a year ago from Axa Sun Life in London, is talking of a three-year turnaround.

"It will take some time," he said, noting that the past year had been dedicated to getting the right people, structure, processes and capability in place.

The coming year will be one of improving Axa's offering to the market and getting the message to potential customers.

"If we can do that successfully, we would expect the third year to show some strong signs of revenue growth in our core markets."

Year one has produced three significant changes in the Melbourne executive suite.

Chief financial officer Matthew Slatter joined four months ago from the Bank of Melbourne. For many years with National Bank in Wellington, Mr Slatter came to Australia with Westpac six years ago.

He is one of several senior appointments Mr Owen believes would have been difficult to have made 18 months ago when Axa was looking less attractive.

Mr Owen also snared Neil Swindells, his general manager for distribution, from AMP.

Marketing and retail products chief Richard Shermon is from Axa Sun Life.

The next management layer also has new blood, but one of the main changes has been the restructuring of investment management, which in Australia and New Zealand will be done through a new joint venture with Axa's New York-based subsidiary, Alliance Capital Management.

Axa and Alliance each own 50 per cent of the equity of the new firm.

Though poor performances in the Australian equities have been blamed for an outflow of investment money, Mr Owen says investment performance has been among the leaders of late.

Unfortunately, perception takes much longer to change than reality. And while the joint venture is valuable for convincing the market that things have changed, it reflects as much as anything that financial institutions are contracting out their global funds management.

The difference in Axa Asia Pacific's case is that contracting out is handled by a member of the group.

But given the company's much-diminished importance in the Australian and New Zealand markets, would Axa Asia Pacific seek to accumulate critical mass by acquisition as well as organic growth?

The turnaround in Australia and New Zealand is based on organic growth, although the Axa group, the world's largest insurance and fund manager, has shown it is not afraid to make acquisitions.

But Mr Owen said Axa had been successful because it had not paid too much, and it ensured acquisitions fitted well and were not something Axa could do organically.

Furthermore, Axa was patient.

* Richard Braddell travelled to Melbourne courtesy of Axa Asia Pacific.