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7/30/2019 Axa - Ppt Format
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INTRODUCTION
1816 - French based Company started by Jacques- Theodore leCarpentier and 17 other entrepreneurs.
Started as Mutuelle Contre de lAssurance Contre IIncendie(MCI).
1847 - MCI decided to diversify its activies. So they created two
companies Mutualite Immobiliere & Mutalite Mobiliere. 1881 Both companies merged to form Ancienne Mutuelle
(AM).
1922 AM offered automobile insurance under then name of
AM Accidents. 1946 Companys 1st merger AM du Calvados.
1972 & 1974 Death of Andre Sahut dlzam & strike hit AM.
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1978 Remnamed the company to Mutueles Unies (MU). At thesame time accquired Compagnie Parisienne de Garan tie.
1982 MU took over Drouot Group and Bebear was appointedas Chairman and CEO of merged entity named Mutuelles UiesDrouot (MUD). Became the largest non state owned insurer inFrance.
1985 MUD changed its to AXA.
1986 AXA acquired Le Providence & Le Sccours.
1988 AXA & Compagnie du Midi merged their insurancebusiness. They got listed in Paris Stock Exchange.
1989 AXA acquired controlling equity stake in Compagnie duMidi and became 2nd largest player in French Insurance market.
Companys revenue grew from 1.4 billion Euros to 7.3 billionEuros. They had 42 subsidiaries across the world.
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1991 They formulated a vision of becoming a global company.
Revenue was 8.1 billion Euros with France accounting 60% and
Rest of Europe with 30%.
They acquired majority stake in US based Equitable Assurance(EA was the 3rd largest insurer in US).
AXA invested USD 1 billion in the acquisition as they also
acquired the subsidiaries Donaldson, Lufkin and Jenrette.
1994 AXA acquired Boreal Assurances for USD 120 million. Itbecame the 4th largest insurer in Canada.
1994 They acquired Victoire Belgium. AXA Management
services was incorporated in Europe.
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1995 AXA acquired 40% stake in National Mutual Life
Association of Australia for USD 840 million (2nd largest inAustralia), New Zealand and Hong Kong).
1996 Listed in New York Stock Exchange (NYSE).
They announced a merger with UAP. It made AXA, 2nd largest
insurer in the world. UAP was taken over by AXA for USD 9 billion stock swap.
1999 AXA acquired Guardian Royal Exchange group for 1.5billion Euros. With this, AXA became 3rd in UK non-lifeinsurance market.
AXAs US Business was renamed as AXA Financial Inc.
They also formed an alliance with Nippon Dantai, 13th largestdomestic life insurer in Japan.
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2000 Bebear became the Chairman of ACA Group
Supervisory Board and Henri de Castries became the Chairman
of AXA Group Management Board. Constantly evaluated the business portfolio to divest from loss
making businesses and those did not fit in the objectives.
2000 AXA sold the majority owned investment-banking
subsidiary, Donaldson, Lufkin & Jenrette Inc. for USD 8 million. 2002 AXAs total revenues were at 74.7 billion Euros and net
income 949 million Euros.
They involved in several line of business ranging from Motor
insurance to property & casualty insurance. 2002 Life & savings segment accounted for 65% of total
premium. Property & Casualty segment for 21%. International
Insurance segment for 8%.
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AXA Board
To achieve the objective of becoming a global company, therewere several management issues like cultural, communication,legal, capital allocation and integrating people and processes.
They had to take care of statutory, regulatory, legal andaccounting & tax systems as they varied from country to country.
In order to reduce to complexity, they introduced a singlebusiness model of financial protection.
AXAs services included asset protection, life protection,investment savings, asset accumulation, retirement annuities and
estate planning. They focused on organic growth by retainingexisting customers and acquiring new ones.
2003 They planned to maintain a balance betweencentralization and decentralization to reduce complexity.
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Cylinders of Growth Priorities to
Achieve Operational Excellence
A differentiation factor which offered value
addition.Product Innovation
Offer best service at best price.Core Business
Expertise
Lessen administrative load and enhance sales
performance.
Distribution
Management
AXA Employees Champions of Operational
Excellence.
Quality of Service
Reduce operating cost & improve quality every year.Productivity
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Supervisory Board
Responsible for the management of AXA Board & accountable to
the shareholders.
Appointed by the Chairman & members of the management board.
Stock repurchase, acquisitions of companies worth over 500 million
Euros, strategic partnership, dividend payment etc Required consent
of the board.
Met at least five times a year and discussed issues pertaining the
groups operation, stock report, strategies etc.
Company shares were provided to the board which was equal to the
annual fees of the directors.Four special purpose committees were formed and members were
elected to handle these committees. Committees Audit, Finance,
Compensation & Selection and Governance.
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Management Board
Decision making body with its members dedicating their time to managing
the company.
Meetings were held weekly to discuss strategy and operations of the group.
Appointed by the supervisory board and they were to handle specific
functions.
10 Business units were created which was headed by a CEO. Executive
committee was created to review and execute AXAs strategy.
Business reviews were conducted by the Executive committee which
consisted of two parts Meetings between the management board and the
business unit members and meetings between the business unit members
and the supervisory board members.Business Support Development (BSD ) teams were created. They reported
to the management board on key projects being considered at the Business
Units.
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At HQ, functions which were centralized were the corporate
strategy, brand management, some key processes and standard
Key Performance Indicators (KPIs).
Capital allocation were centralized to minimize cost of capital
and ensure financial strength.
Risk management was also centralized.
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Key Performance Indicators
Customers
Market Share Net Cash Flows
Client Satisfaction
Employers
Scope resultemployees
Scope result agents
Shareholders
Combined ratio Present value of
future profits in life Life and savings
costs/income ratio
Stakeholders
Implementation ofAXA Way
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AXA Asia Centrally Managed
Functions
CorporateOffice
Financial Reporting
Corporate Planning& Development
Internal Audit
Business &Distribution
Retail Business
Health Business
Commercial
Business
Distribution &Marketing
RegionalManagement
ServiceActuarial
Claims
Finance
Human Resources
Process & IT
Reinsurance
Project Management
Communications
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Objectives of Procurement
Lower Costs The procurement team must contribute to cost reduction.
Support the Business
Procurement team has to negotiate for best prices and services.
Secure Delivery
The business must get what is has requested for : Procurement is alsoresponsible for implementation of the contract.
Develop sustainable and ethical relations with suppliers Maintain excellent relationship with the suppliers by adhering to a set of
clearly defined procurement guidelines and promoting ongoing dialogue.
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2004 Due to centralization of procurement, they were able to
save 100 million Euros.
2005 They had 115 regional and global contracts.
Savings due to centralized contracts Telecommunications25%
Office Supplies 15%
Professional Services 15%
Desktop systems 15%
Travel10%
Infrastructure on demand 10%
Software 5%
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Leverage AXAs global scale to reduce groups annual IT operations spending.Improve operational effectiveness.
Deliver consistent high quality service
Become business enabler.
AXA tech managed over 600 million Euros in IT budgets of the
group.
Since 2001, They were able to achieve annualized 160 millionEuros.
By 2007, they planned to expand scope of AXA tech to cover all
companies.
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AXA Efforts to Decentralize AXA implemented good corporate governance across the group.
All subsidiaries were governed by a board, which included non-executive directors. Audit committee oversaw the functioning.
All subsidiaries prepare 3 year forecasts. They have critical reviewto make the forecasts better.
Company believed that the employees are the most valuableassets and to achieve global standards, it has to motivate theemployees.
They encourage best practices to employees in professionalism,innovation, pragmatism, team spirit and integrity.
They provided equal opportunities in hiring, pay and promotionto all employees.
Subsidiaries have their own local strategies. These were necessarybecause local laws, practices and distribution models guidedinsurance companies.
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AXAs subsidiaries launched products that were in demand intheir local markets.
Products were designed to keep customers need in mind.
All subsidiaries were free to have their own distribution practices.
2003 AXA had a central risk management department with 50employees and local risk management departments with 200
employees. Focus of risk management department asset liability
management, profitability of the product, reserving policy &reinsurance strategy, information system & modernization andmanaging operational risks.
Risk management department submitted an annual report to thesupervisory board, management board and to the auditcommittee.
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AXA Strategic PlanStrategic Imperatives
Profitable new businessgrowth
Negative spreadmanagement
Increase customerretention
Manage our costs
Asset allocationmanagement
Improve our service levels
Be an employer of choice
Strategic Programs
Distribution
Products
Technical & InvestmentMargins
Customers service &Operational Efficiency
HR
InfrastructureEnhancements
Regulatory compliance &others
Key Performance
Indicators (KPIs)
New Business
Negative Spread Policies
Profitable Policy S&L rate
Economic Expenses Return on Investment
Customer Satisfaction
Employees Satisfaction
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They reaped several benefits by striking balance betweencentralization and decentralization.
They had firm control over some of the most importantactivities and were able to steer the subsidiaries towardsgrowth.
At the same time, the subsidiaries were free to carry outtheir day-to-day operations.
2004 Acquired Mutual of New York (MONY) for USD1.5 billion.
2005 They launched Ambition 2012, with the objectivefor becoming the most preferred company in the insuranceindustry.
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