Axa Wealth International to be sold 29 April 2016

Axa Wealth International to be sold

Axa has agreed to sell its Isle of Man-based operations of Axa Wealth International to specialist M&A firm Life Company Consolidation Group (LCCG).

In a short statement released today, Axa said that completion of the transaction is subject to regulatory approvals and the usual conditions and expected to complete in the second half of 2016.

The parties agreed not to disclose the terms and conditions of the transaction, Axa said.

LCCG said in a statement on its website that its strategy is to "maintain and grow the UK franchise and to continue the highly successful relationships with Axa Life Europe for the provision of offshore bonds in to the UK from Dublin, and with Axa in Hong Kong and Singapore for the distribution of products in Asia”.

It added that will seek to enhance and complement the new business growth of Axa Isle of Man through acquisition led growth.

Axa’s Isle of Man business is a major provider of offshore bonds into the UK from the Isle of Man and one of the largest UK providers across the Isle of Man and Dublin, with over £9bn of assets, LCCG stated.

Axa Wealth International is the brand used for the promotion of offshore investment products offered by Axa Isle of Man and Axa Life Europe, according to Axa Life Europe’s web site.

Axa Life Europe is authorised by the Central Bank of Ireland, and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority of the UK.

Founders have 40 years of life sector experience

LCCG lists its main business activity as the acquisition and consolidation of books of life assurance business in Europe. It was founded in 2013 by Paul Thompson and Ian Maidens who between them have over 40 years of experience in the life sector.

Thompson's career included a role as group chief executive of Britannic Group in 2003 where he restructured the business as consolidator and merged it with Resolution I in 2005. It was subsequently sold to Pearl Group (now known as Phoenix).

Maidens worked with Resolution I from its inception and became a founding partner of Resolution II in 2008, leading it to the creation of what was Friends Life Group.

According to LCCG’s web site, the firm has a group head office in London, with its holding company registered in Guernsey. Its main operating entity is Harcourt Life Assurance Company which is based in Dublin and regulated by the Central Bank of Ireland.

In December last year Harcourt Life bought Scottish Mutual International from Phoenix Life, part of the Phoenix Group.

More sales expected

Further consolidation in the international life industry was predicted during the CEO main platform roundtable at International Adviser’s 10th anniversary FundLinks Forum last September.

At the time, Mike Foy, managing director of Axa Wealth International, did not respond to speculation that French insurer Axa Group may be looking to sell off all of its UK businesses.

Foy also pointed out during the debate that he had “worked for Axa for 16 years, a huge global group bringing huge benefits. We’ve had a flat UK market, we’ve written 4% of our volume out of Hong Kong and that’s entirely because we have a local business in Hong Kong”.

The Axa announcement of today's sale follows a report in The Financial Times late last week that the French insurance giant was close to its Sun Life unit to the Phoenix Group, a UK insurer, for around £500m ($717m, €634m).

The possible sale of Axa’s UK life insurance and wealth investment units has been a subject of speculation in the industry for some time with media reports suggesting the company had hired Barclays and Fenchurch Advisory Partners to help it sell off parts of the Axa Wealth operation and other blocks of business too.   

Axa operates a range of business in the UK, including Axa Wealth, which includes investment manager Architas and the platform Axa Elevate, the private medical insurer Axa PPP Healthcare, and the general insurer Axa Direct and Partnerships.

Standard Life is understood to be bidding for Axa’s Elevate, a platform that helps UK IFAs manage client investments.

The sale of Axa Wealth International is the latest move towards a consolidation in the international  life industry among European insurers as low interest rates and the new Solvency II capital push them to adjust their business models and offload less profitable units.

Earlier this month, Dutch-headquartered life group Aegon agreed to sell two-thirds of its UK annuity book, worth £6bn, to insurer Rothesay Life.