New AXA owners have no reason to shake it up: Stewart

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AXA New Zealand's new owners, regardless of who they are, have no reason to mess with a winning formula, according to the life insurer's chief executive Ralph Stewart.

Tuesday, February 9th 2010, 5:26AM 1 Comment

by Paul McBeth

He told advisers at a roadshow in Wellington that the New Zealand business is one of the nation's top 20 companies by market capital and earnings and with the opportunity growth available in the local market the new owners, be it National Australia Bank or AMP, are unlikely to embark on a major shake-up of the business.

"We don't believe they're buying to sell," Stewart said. "They're paying a substantial premium and they will want to realise that premium."

NAB trumped an offer an offer from AMP in December to buy AXA Asia Pacific Holdings in an arrangement that would see the Asian operations sold back to French majority shareholder AXA SA. The NAB offer valued the Australian and New Zealand businesses at more than A$13 billion.

AXA SA's exclusivity agreement with AMP expired on Saturday, and the Australian wealth manager and insurer is no longer a substantial shareholder of the Australian-listed AXA A, opening the way for other offers to proceed.

Stewart said he expects the deal to be finalised by June at the latest, as it goes through all of the usual regulatory approvals.

AXA NZ projects the New Zealand life insurance business could grow at 7% per annum, with individual life policies a strong area for growth.

With between 620,000 and 830,000 employed people not insured, Stewart said they estimate potential market growth of between $250 million and $500 million.

"Individual life insurance continues to be the king opportunity - the lead-in to that is families, and the gateway to families, as everyone knows, is a trusted and respected adviser network," he said.

Paul is a staff writer for Good Returns based in Wellington.

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