Axa CEO: Strategic Realignment Spurs Revenue Growth
February 26, 2018 by David Pilla
PARIS – A strategic refocusing on health, protection and commercial lines business is paying off for Axa SA as it looks to new business opportunities amid growing revenue, said the group’s chief executive officer.
The group’s strategic revamp, which included a new focus on health and protection (unit-linked) businesses as well as commercial property/casualty operations, are bearing fruit along with Axa’s efforts at simplification and local-level decision-making, said CEO Thomas Buberl in a conference call.
Buberl said a good example of Axa’s efforts to both grow its health market and get closer to the customers is its recent decision to acquire Chicago-based health benefit administrator Maestro Health Inc. for US$155 million (Best’s News Service, Jan. 28, 2018). Maestro has a digital integrated platform with health benefit administration and third-party administrator services for self-insured companies. Founded in 2013, Maestro targets midsize and large-size employers across the United States. It serves more than 500 groups and 1 million lives.
Buberl noted the 1 million people covered by the Maestro plan are an indication of the size of health care related opportunities.
Axa is looking to change its exposure to risk, and in particular financial risk, said Buberl. “We have decided to implement an IPO project regarding our American activities to be able to release the means we need to reinvest in our chosen sectors,” he added.
Last November, Axa filed a registration statement with the U.S. Securities and Exchange Commission for the partial IPO of Axa Equitable, its U.S. financial services business as part of a refocusing on core countries and lines of business (Best’s News Service, Nov. 14, 2017). Buberl said the spinoff is part of an overall strategic realignment in its Ambition 2020 plan.
Axa is also reaffirming its decision to remain in the asset management business, a “crucial” decision, which according to Buberl reinforces the group’s ability to remain a strong player in life insurance.
Buberl said all five of Axa’s major geographic areas worldwide contributed to stronger 2017 results, and two of those regions — France and Europe — which in recent years has had disappointing results for the group, in 2017 showed improved performance.
The Asia, U.S. and international regions all contributed robust growth for the group in 2017, he said.
Buberl said the three target growth lines all showed strong results in 2017. Revenue for commercial lines rose 2%, he said. Health insurance revenue for 2017 rose 6%. In the unit-linked line, value of new business rose 7%.
According to Buberl, Axa is ahead of the market in its core area of France regarding unit-linked business growth.
The group also made progress in its effort to bring decision-making closer to the customer by allowing managers to make decisions that fit diverging realities seen in individual countries, Buberl said.
Buberl said Axa’s achieved strong 2017 results after two years of what he said were “significant changes” for the group, including a series of upper management changes in 2016 that included the elevation of Buberl himself to the CEO position (Best’s News Service, March 21, 2016). In 2017, Buberl said Axa implemented a number of strategic changes.
Axa reported 2017 net income of €6.21 billion (US$7.66 billion), up 8% from a year earlier. Gross revenue fell 2% to €98.55 billion.
The property/casualty combined ratio for 2017 improved 0.4 points to 94.6.
Underwriting affiliates of Axa SA have current Best’s Financial Strength Ratings ranging from A+ (Superior) to B+ (Good).
(By David Pilla, news editor, BestWeek: David.Pilla@ambest.com)
BN-NJ-2-22-2018 1205 ET #
