Axa plans €10m investment to expand financial services

 

GLOBAL INSURANCE giant Axa plans to invest €10 million in establishing a new financial services business in the Republic.

The company is mainly focused on the motor and home insurance businesses here, but intends to launch a new division geared at selling investment products. The operation will sell investment products based on international investment vehicles and funds.

Axa intends spending €10 million on setting up the business here. The figure includes the statutory sum that such an investment firm is required to have on reserve and the actual operating costs of the operation over five years.

Adrian Cassells, former head of Axa in Ireland, will run the new division. It will sell the products through a network of brokers in the Republic.

Despite its profile here, about 60 per cent of Axa’s worldwide business is in the life and pensions area. It is understood that the group has been looking for some time for a way of exploiting this expertise in the Irish market.

The company has come up with a mix of products focused on the US, European, Japanese and emerging markets, as well as bonds and other instruments.

Axa believes that Irish investors have been overexposed to the Irish market in recent years and intends offering them an opportunity to diversify from this.

Irish equities have fallen by an average of 30 per cent over the last two years, while their European counterparts are down just 9 per cent.

Axa is already offering these products internationally and has been operating a similar business successfully in Britain for the last seven years. The products sold there have been the top performers in their peer groups, according to Axa.

The company has tested the funds that will be offered to Irish investors and has based its choice of investments on those it believes are most likely to offer sustained growth.

Axa is the third biggest general insurer in the Republic.

It established its presence here 10 years ago when it bought British-based Guardian Royal Exchange, which had previously acquired PMPA.