AXA's plans for Asia-Pacific in Ambition 2020

In June this year, AXA Global revealed its ‘Ambition 2020’ strategy: a five-year plan to grow earnings and increase dividends, even in a market of continued low interest rates. Asia-Pacific was highlighted as a key market to help achieve the group’s goal, with targets of 10%-12% growth in life and non-life markets.

The group appointed Etienne Champion to the role of AXA Corporate Solutions Asia-Pacific chief executive in February, and he’s wasted no time getting started.

First, he is focusing on three new lines of business. One is oil and gas downstream on specialty chemicals, which Asia-Pacific will start writing from 1 January. Parametric-based insurance products is another.

Champion says: “We recently hired one person [to look after parametric solutions] who’s based in China, because the two most promising markets in the region for this line of business are China and India. Indonesia is also interested.”

The third line is a cyber insurance product – a new departure for the insurer in this part of the world – that’s being written from Singapore.

Of course, there are also opportunities for growth in existing lines of business that Champion and his team are targeting to help achieve average annual growth rates of 3%-5%. These include property, construction and international programmes.

“We are looking at Thailand, which has a lot of infrastructure projects coming up, and also in Malaysia,” he says. “We still think Myanmar could have some big infrastructure projects for 2017 or 2018 too. They’re missing a lot of basic infrastructure – roads, bridges, trains, etc – which have to be built if the country decides that it’s stable enough to go ahead. There’s a lot of projects coming on board that we want to be in.”

When it comes to international programmes, Champion says there is also room to grow in Asia- Pacific: “It is our bread-and-butter product in our European book – about 90% of the premium is made out of international programmes. But here international programmes are not that developed. There is a market for this, but the demand is much smaller currently. We do think it will develop.”

Korea and Japan, where the insurer is represented only in direct and life products, are also in Champion’s sights. “There is no General Insurance entity in Korea, there is no General Insurance entity in Japan, and those are the two biggest economies outside of China. So we will certainly emphasise strongly our commercial efforts over there,” he says.

TWO BECOME ONE

One concern he and his team have had to contend with is confusion over the insurer’s Corporate Solutions brand and General Insurance brand. “When I met brokers here, one of the first questions was, ‘How do you not overlap, or walk on each other’s toes?’ And that was a really good question,” he says.

“We thought about how to maximise both entities’ strengths – the AXA Corporate Solutions experience in the corporate sector and international programmes, and the strengths of the General Insurance entities, who are by far more numerous than us and out in the field every day.” AXA Corporate Solutions is based in Hong Kong, Singapore, China and Australia.

The solution, launched on 2 August, is known as One AXA Asia. At its core, this means that brokers or insurance buyers are given one local point of contact.

“We set some very simple principles around this. The first principle is that when there is a GI entity in one country, this GI entity faces the market for everything. So in Malaysia, they will face the brokers’ requests and the brokers only have one entry door – through the GI teams,” he explains. “For a broker, I could stop there, because this is the main question. Because what’s important for them is that they receive an answer and they receive an answer in due time.”

But what is the path that a risk takes to reach the right resources in AXA? The basic principle is that for non-special risks, the local General Insurance entity will issue the price, conditions, deductibles, etc.

That leaves the Corporate Solutions teams in charge of underwriting non-marine special risks including those in powergen, midstream and downstream petrochemicals, semiconductors, and pulp and paper.

With local General Insurance entities being given the authority to handle corporate business, a significant investment in training is underway. Eleven practice leaders – in property, construction, liability, financial lines, special risks, marine hull, and marine cargo – are being charged to support the commercial development with the local teams.

“We have to train the General Insurance entities so that the commercial development [in their region] is good and they start to think like we do in terms of risk selection,” Champion says.