AXA's rivals to foot bill as insurer quits lobby group
Published 06/01/2012 | 05:00
AXA has taken the unprecedented step of quitting the Irish Insurance Federation (IIF), causing ructions for its industry peers who will be left footing Axa's share of the lobby group's bill.
Axa boss John O'Neill confirmed the move to the Irish Independent yesterday, saying his company "couldn't justify" the cost of IIF membership in the current economic climate.
Axa is understood to have paid about €220,000 to the IIF in 2010. Some of the money went to services that Axa will still have to pay for, like fraud data, but the firm still expects to save more than €100,000 by quitting IIF membership.
Insurers across the board have been slashing expenses to deal with industry woes, but membership of the IIF has traditionally been seen as a necessary cost and every major insurer holds membership.
"It's certainly not something we'd ever have considered cutting out," one senior insurance figure said last night. "As a major player, you have a responsibility to be involved and do your share."
IIF chief executive Mike Kemp insisted his organisation delivered "value for money" by lobbying on key issues in Ireland and abroad, keeping members updated on regulatory affairs and providing services like a fraud data base.
Industry sources last night expressed frustration that Axa would still be able to benefit from any pro-insurer policies the IIF successfully lobbies for, even though it was no longer paying for those efforts.
"That's true up to a point, but if everyone thought that you'd have no lobby," said Mr Kemp.
"Databases are only available to members, and non-members have no influence on the lobbying positions the IIF takes."
Mr Kemp said the cost for other members could "rise slightly" as a result of Axa's departure, since the cost of running the IIF would now be spread across a smaller group of insurers.
Asked whether he was concerned that other insurance companies might follow Axa's lead, Mr Kemp said no other company had "indicated" any plans to leave and he didn't "anticipate" that any would.
It is understood that the 'new' Quinn Insurance, now owned by Liberty Mutual and Anglo Irish Bank, has indicated that it plans to remain within the IIF fold and actively participate in industry discussions.
Aviva, which is embarking on a major cost-cutting plan, is not believed to have considered eliminating IIF membership.
Several other insurers privately confirmed yesterday that they were not considering quitting.
Mr O'Neill, a former president of the IIF, said Axa had first begun considering withdrawing from the lobby group several months ago and had given Mr Kemp's team opportunity to pitch for Axa to stay involved.
AXA had meetings with several key IIF figures but ultimately decided to leave before Christmas, and notified Mr Kemp of this. Its withdrawal becomes effective in February.
"We've been looking at every single cent of our costs," Mr O'Neill said. "We took the view that our policyholders weren't getting enough value from it to compensate for the money we were putting in."