Axa rules out Equitable bid in favour of UK consolidation

Axa, the world's biggest insurer, yesterday ruled itself out of the bidding for Equitable Life, the Britain's oldest mutual life insurer, which is up for sale.

Axa, the world's biggest insurer, yesterday ruled itself out of the bidding for Equitable Life, the Britain's oldest mutual life insurer, which is up for sale.

Henri de Castries, Axa chief executive, said yesterday: "I don't think it is a high priority." He added that the main goal of the group in the UK was to consolidate after a hectic 18 months which have seen the group acquire Guardian Royal Exchange, the general insurer, and buy out the minorities at Sun Life and Provincial.

"We are not interested in something just because a lot of other people are bidding for it," Mr de Castries said yesterday as he unveiled a disappointing set of half-year results. Weak UK life sales and the need to raise reserves in the UK general business to bring it in line with more cautious group policy resulted in net income rising just 3.11 per cent to 1.11bn euros (£660m) in the first half, well below analysts' expectations. Rivals such as Allianz and Aegonrecorded double digit profits growth over the same period. Axa shares fell 8.3 euros to 149.6 yesterday.

The group has taken a 76m euro hit in the UK on top of a further 47m charge as a result of an upwards revision to estimates of the cost of last December's storms. UK life sales were down 7 per cent, a fall Mr de Castries blamed on general uncertainty ahead of the introduction of stakeholder pensions next year.

The Prudential and CGNU, the UK insurers, are seen as leading the field in the bidding for Equitable. Aegon, the Dutch insurer, is also planning a bid. Latest indications are that Allianz, which was also believed to be interested, has dropped out.