AXA has won a legal battle against Santander over compensation linked to mis-sold Payment Protection Insurance (PPI) policies from before 2005. The dispute, which unfolded at London’s High Court in 2021, centers on policies originally sold by GE Capital Bank—part of General Electric until Santander took it over in 2009.
AXA took action after facing losses from more than 650,000 individual complaints related to these PPI policies, which have become one of the UK’s most expensive retail financial scandals. Banks have paid out roughly £40 billion in compensation nationwide. AXA, which acquired certain liabilities through its 2015 purchase of units from Genworth Financial, had already paid nearly £500 million in customer redress and over £70 million to cover complaint-related costs.
Judge Julia Dias ruled that AXA is entitled to an indemnity from Santander Insurance Services UK. Essentially, Santander must contribute toward the redress payments and fees connected to these claims. AXA’s legal team estimates the claim could be worth about £675 million. However, an AXA spokesperson noted that the insurer would only receive a portion of this amount, as Genworth has already reimbursed much of the losses.
Genworth Financial also weighed in, saying it expects to receive around $750 million from this outcome, although the exact figure will depend on the exchange rate.
Santander, on the other hand, disagrees with the ruling and plans to appeal. A company spokesperson said they do not expect this judgment to have a significant financial impact, given provisions already set aside and ongoing legal options. They also stressed that no customers have been affected by AXA’s claim or the judgment, and past PPI redress payments remain unchanged.
This judgment sheds more light on the long-running fallout from the PPI scandal. Many institutions involved have faced heavy costs and legal battles as customers seek fair compensation for years of mis-sold insurance policies. The case between AXA and Santander adds another chapter to this ongoing saga.