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Solid business growth in key areas coupled with a significant reduction in costs resulted in AXA New Zealand having a successful year, making an improved contribution to the financial results of publicly listed National Mutual Holdings Limited, the company says.
The NZ$17.9 million profit from the New Zealand operations - which incorporate life, health, savings and funds management - represented a 28 per cent improvement on the previous year.
Improved profit performance came from all sectors of the New Zealand business. It reflects increased focus on risk and funds management activities as well as product innovation over the past three years, the company says.
During the year the company changed its name from National Mutual to AXA, and the new brand has achieved a high level of customer recognition.
Also AXA reviewed its product range closing down a number of funds, and launching a new international equities fund. These changes contributed to the decline of traditional savings-type life insurance, and overall total premium income declined by 2.3 percent.
AXA improved its already dominant position in the group life market, while annual premium income from trauma, term, income protection and group risk insurances grew by 16.2 percent.
Profitability in the funds management and health subsidiaries was up on the previous year, and success in the corporate health market, which grew by 32 percent, made a major contribution to health sales.
The company has whittled costs out of the business and will continue to do so.
"Our management expenses are down 20 percent on the previous year, and our target of achieving an overall reduction in operating expenses of 35 percent by 2001 is very much in sight," NZ chief executive Ross McEwan says.
AXA New Zealand is in the early stages of repositioning its business to adopt more of a customer focus.
"We are determined to exhibit and communicate our commitment to customer service. However, it takes time to make large-scale changes.
"We have the right product mix for today's needs, and the importance of retirement savings is gaining greater acceptance. Moreover, the decision we made not to participate in the accident market with the privatisation of ACC, will ensure we are not embroiled in any decision the incoming Government may make in relation to how it will be administered," McEwan says.
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