Can Elephants Dance? Why Not, Says This Herd Leader
From $250 billion in 2020, a study found total value of premiums produced by insurtech will cross $556 billion in 2025. The Juniper Research study forecasts that shifting customer loyalty, premium reductions from increased competition and sweeping digitalization will cause carriers in motor, life, home and health insurance to lose sheen with potential customers. Juniper ranked 20 largest carriers on innovation, investment success and placed AXA, Ping An and Munich Re as pack leaders. This article covers AXA’s modernization endeavors and the role of AXA Next, its ecosystem play.
France-headquartered AXA has more than 107 million customers in P&C insurance, life and savings, asset management and other services. A top three insurance provider globally, it has made substantial strides in last few years. AXA’s strategy has been two pronged — drive efficiency in core business and transform for the digital age through new capabilities and value propositions.
Prior to 2016, AXA had identified few strategic themes:
- Shift business profile towards technical risks
- Simplify the group
- Scale innovation in health.
One of its boldest moves since was to pivot from life and savings to commercial P&C, by acquiring US-based XL Group, making it the largest P&C player globally. It increased focus on health insurance, accelerated growth in Asia and launched a new business unit — AXA Next — to build an innovation ecosystem to develop services and business models beyond insurance.
This ecosystem serves to collaborate on new products and services. At the org level, AXA Labs identifies innovation in emerging areas. Externally, it collaborates with partners of varying maturity to explore new business opportunities with startups (Kamet) and corporates (AXA Partners).
With an ecosystem of 8 units geared to accelerate innovation, AXA Next and its 10,000 Nexters serve millions in over 40 countries, generating €3 billion of revenues with rapid growth in key segments. The objectives of the ecosystem are to:
- Tackle emerging and global risks
- Replicate and scale innovative solutions
- Radically improve and simplify customer experiences
AXA Next has delivered services such as to improve health outcomes for patients while reducing health costs with new protection offers for ecosystem partners. It is the first contributor to health services revenues within the Group, supporting its Payer to Partner ambition. It offers 24x7 telemedicine services to over 5 million in France, with deployments in Italy and Belgium and plans to scale to low-income consumers outside Europe. It provides medical assistance to customers of 5,000 hotels worldwide through a partnership between Accor and AXA.
At the group level, the AXA strategy is bearing fruit and has resulted in improved customer satisfaction (21% more businesses met or exceeded local market average NPS) and strong operational performance. The Group has progressively diversified to offer complementary services with insurance coverage.
With technology at the forefront of its strategy, AXA via its ‘Move to the Cloud’ transformation program, migrated a couple of thousand applications. The cloud has enabled AXA to exploit innovations, such as in AI, ML, chatbots, image, and facial recognition. Multiple AXA entities now leverage the cloud, including the first on-demand cover to protect drivers’ earnings, a data-lake platform to enable automatic upload of customer feedback and response, a smart platform for data scientists to independently conduct big-data projects. Another cloud application connects AXA with a price comparison portal, driving shorter development time, quicker reaction to business demands and happier customers.
Last December, AXA unveiled its strategic plan for 2021–23. The roadmap outlines development of health and pension as a key imperative, targeting an average growth of 5% in revenues. Simplification of customer experience and improved productivity is expected to reduce costs by nearly $600 million. AXA continues to deliver on its turnaround game-plan and is poised to stand its ground against nimble competitors — a veritable playbook for incumbents struggling to get their act together.
Originally published at: https://dailyfintech.com/2021/03/11/fleet-footed-giants-trail-blaze-ecosystem-paths/
