At an AXA Group investor conference held today in Paris, AXA Asia revealed its ambitious strategic plan for the next five years, with the objective of growing underlying earnings by 10-12% CAGR from €551 million in 2015 to ca. €900 million in 2020.
While the insurance market in Asia is anticipated to grow 6-7%1 per year through economic growth, closing of the savings and protection gaps and the rise of the middle class, AXA Asia’s objective is to outperform the market growth by 4-5% to achieve underlying earnings CAGR of 10-12% between 2015 and 2020 to further accelerate its contribution to the underlying earnings of AXA Group. AXA Asia’s underlying earnings grew at 17% on average and more than doubled over the 2010 to 2015 period. In 2015, AXA Asia accounted for 25% of the New Business Value (NBV) of AXA Group, and contributed to 16% of AXA Group’s underlying earnings growth from 2011 to 2015.
Jean-Louis Laurent Josi, member of the AXA Group Management Committee and Regional Chief Executive Officer of AXA Asia said, “With the successful delivery of our “Ambition AXA” strategic plan from 2011 to 2015, AXA Asia has built a leading, diversified and profitable platform in the region. Leveraging our unique advantage as an established composite insurer covering 8 markets and 20 million customers, our focus for the next five years will be on the transformation of our entire organisation as the customer-centric insurer, enabling us to anticipate, prevent, protect and care for those we serve. This will enable us to capitalise on the region’s evolving needs and accelerate our growth during this new phase.”
The objective of outpacing the market growth will be achieved through the acceleration of a number of proven key enablers including the following four:
- Leveraging AXA’s unique partnership portfolio
- Reaching new customer segments
- Delivering more value from AXA’s existing customer base
- Improving the business mix
Leveraging AXA’s unique partnership portfolio
AXA has established a proven track record of successful partnerships. Now, AXA’s Asia ambition is to further leverage these strong relationships around the region, including ICBC and Tian Ping in China, Krungthai in Thailand and Bank Mandiri in Indonesia, to address a combined base of over 700 million customers in Asia.
Laurent Josi noted, “In China, ICBC-AXA Life started operations in 2012 and has already become the #1 international insurer in Life & Savings2. However, we have enormous untapped potential ahead of us, which is to leverage the largest bancassurance deal in the world, as we currently have only reached less than 1% of ICBC’s customers in China.”
Reaching new customer segments
As more and more customers in Asia will progress from the lower income segments to the developing middle class, AXA wants to grow its offering and business along with them to become their partners and a leader in the highly under-insured emerging middle class segment with a target of serving over 35 million customers in this segment by 2020. Based on this target and customer demographics, AXA Asia will offer simple yet innovative products focusing on these specific customer needs, with the focus on the strategic markets of Indonesia, India, Thailand and the Philippines through partnerships with in particular Telcos, payment banks and retailers. In Indonesia, AXA has already sold 1.5 million policies to emerging customers in this segment and maintains a profitable portfolio. Going forward, AXA Asia is well positioned to capture the market potential and accompany its customers throughout their economic enrichment.
Extracting more value from AXA’s existing customer base
By deploying cross-selling initiatives across the region, AXA’s Asia ambition is to more than double the number of Life & Savings (L&S) and Property & Casualty (P&C) customers with more than one contract. In Hong Kong, where AXA is the #1 P&C3 insurer and #5 L&S3 insurer in its market, there is a clear opportunity to leverage digital capabilities to deepen AXA’s engagement with its customers, as currently only 2% hold both L&S and P&C contracts.
Improving the business mix
With a continual shift of its business mix towards less interest rate sensitive and more profitable products, AXA Asia will focus on developing the Protection & Health and Unit Linked business in L&S, while in P&C, expand into more profitable lifestyle products such as Home, Travel, Personal Accident and Liability. With a significant proportion of APE already derived from Protection & Health and Unit Linked products, AXA Asia will continue to grow the Lifestyle Premium fourfold from 2015 to 2020. In Thailand, where AXA is the #3 L&S insurer4 and where the market has a strong preference for Pure Savings products AXA already managed to start shifting its product mix towards more protection, thereby significantly improving the NBV margin.
Laurent Josi further commented, “Off the back of clear and proven growth enablers, our strategic plan will drive AXA Asia’s objective to outpace the market. Coupled with a strong culture of innovation and a diverse talent base, we have firm foundations to achieve our goal of serving over 100 million customers in Asia by 2030.”
1 Source: Munich Re Insurance Market Outlook, AXA estimates
2 Source: CIRC statistics as of December 31, 2015.
3 Source: For L&S, Office of Commissioner statistics as of September 30, 2015 based on gross written premium for the individual life in-force business. For P&C, Office of Commissioner statistics as of September 30, 2015
4 Source: TLAA statistics report as of November 30, 2015.
Jean-Louis Laurent Josi, member of the AXA Group Management Committee and Regional Chief Executive Officer of AXA Asia
ABOUT AXA ASIA
AXA Asia is a market leading insurance player offering a differentiated composite proposition in Life and General Insurance with operational presence in Hong Kong, Singapore, Indonesia, China, India, Malaysia, the Philippines, and Thailand. AXA Asia is part of the AXA Group, headquartered in Paris and a worldwide leader in insurance and asset management with a presence in 64 countries. AXA Asia is committed to creating a sustainable, long-term business for our employees, customers and shareholders. Follow us on Twitter @AXA_Asia.
ABOUT THE AXA GROUP
TThe AXA Group is a worldwide leader in insurance and asset management, with 166,000 employees serving 103 million clients in 64 countries. In 2015, IFRS revenues amounted to Euro 99.0 billion and IFRS underlying earnings to Euro 5.6 billion. AXA had Euro 1,363 billion assets under management as of December 31, 2015.
TThe AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR 0000120628 – Bloomberg: CS FP – Reuters: AXAF.PA). AXA’s American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.
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It is a founding member of the UN Environment Programme’s Finance Initiative (UNEP FI) Principles for Sustainable Insurance and a signatory of the UN Principles for Responsible Investment.
AXA Asia Contacts:
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