Property & Casualty: AXA Direct

Transcription

1 Investor Day 4 December, 2013 Property & Casualty: AXA Direct Stéphane Guinet CEO, AXA Global Direct

2 Cautionary note concerning forward-looking statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to the section Cautionary statements in page 2 of AXA s Document de Référence for the year ended December 31, 2012, for a description of certain important factors, risks and uncertainties that may affect AXA s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. C2 Investor day Property & Casualty AXA Direct December 4, 2013

3 Today s key messages Unique global Direct franchise based on a low cost strategy already delivering in 9 markets Leveraging our newly developed key assets across the AXA Group C3 Investor day Property & Casualty AXA Direct December 4, 2013

4 Leading Direct franchise with a unique geographical footprint In Euro billion Direct premiums Source: Companies data revenues breakdown by country France 21% Portugal 1% Belgium 3% Italy 5% Poland 3% Direct s revenues: 2.2bn UK 24% 3 South Korea 17% Japan 17% Global integrated low cost platform Dedicated Management team Represents ca. 20% of Group motor retail revenues Ca. 5 million policies in 2012 Targeting the most price sensitive clients Spain 9% Source: AXA estimates based on regulators publications and peers reporting C4 Investor day Property & Casualty AXA Direct December 4, 2013 All notes on page C20 Over 60% of new business coming from internet

5 Direct entities have been consistently outperforming the market and are now growing profitably Gross revenues Underlying Earnings Reported figures In Euro billion Reported figures In Euro million CAGR 7% - 12% Current year combined ratio 106.0% 101.7% 100.5% 99.9% 97.0% FY11 1H E CAGR Market* 1% AXA Direct 7% * Source: AXA estimates Expected CAGR Market* 0% AXA Direct 7-12% -62 FY11 1H E Additional Euro 200 million of Underlying Earnings over Despite deteriorating motor growth in most of AXA Direct s countries 1, AXA Direct is still expected to continue strongly outperforming the market Ambition: optimize growth under profitability target C5 Investor day Property & Casualty AXA Direct December 4, 2013 All notes on page C20

6 thanks to a technology driven strategy 1 2 Pricing sophistication Nano-segmentation Competitive and behavioral pricing Customer intelligence & acquisition Web funneling and servicing Aggregator intelligence Value-driven retention Simple products and standard offer Highly profitable up selling: ancillaries 3 Low-cost operating model Process automation and alignment Light expenses management Optimized and industrialized claims management C6 Investor day Property & Casualty AXA Direct December 4, 2013

7 1 Pricing sophistication Enabling profitable growth How to compete on price while protecting profitability? Simple products Naked standard product High price elasticity Logic of bargain price Quality preserved + Range of ancillaries Lower price elasticity Margin generation Richness of services proposed Focus on ancillaries: Volume x 5 between 2009 and 2012 Sophisticated pricing Technical pricing Behavioural and competitive pricing Excellence in execution Current Year loss ratio evolution (excl.uk) Ca. -3pts Enables enhanced client retention and profitable acquisition of new clients Ca. -1pt C7 Investor day Property & Casualty AXA Direct December 4, 2013

8 2 Customer intelligence & acquisition Use of web to decrease acquisition cost, increase productivity and maximize servicing Web-originated sales Motor acquisition costs reduced by 15% per policy 63% % Motor new business Policies increased by 13% Key success factors Acquisition cost efficiency Systematic use of the web for low value-added client interaction Push information to the client C8 Investor day Property & Casualty AXA Direct December 4, 2013

9 3 Low-cost operating model Lean processes Enlarged expense ratio reduction Simplification of Contact Centres interactions % -5 pts 25% 33% -5 pts 29% -36% +23% % France 1 2 Continental Europe In both mature entities and start-ups Inbound calls per new finalized policy at contact centers In-force policies per inbound call Inbound calls per opened claim Key success factors Process efficiency: simple products, technology support, low administration Investing into convergence of IT platforms Improving time-to-market and flexibility for local business needs Aligning individual performance management with business success C9 Investor day Property & Casualty AXA Direct December 4, 2013 All notes on page C20

10 France, Japan and South Korea are among our largest markets AXA Direct France 1 Current year combined ratio AXA Direct Japan Current year combined ratio AXA Direct Korea Current year combined ratio 103.5% 98.5% 96.6% 98.0% 96.6% 95.5% 94.4% 94.4% 95.8% 93.0% 108.3% 104.0% 101.7% 100.7% 100.3% Gross Revenues In Euro million % 283 Gross Revenues In Euro million % 174 Gross Revenues In Euro million % 216 FY11 1H12 1H13 FY11 1H12 1H13 FY11 1H12 2 1H13 First mover advantage Strong brand awareness Superior pricing capability Competitive price positioning Cost advantaged Superior pricing capability Competitive expense management Strong brand awareness Cross selling potential with AXA Life Innovator High productivity Benefit from Ergo Daum Direct acquisition Strong potential to further transform the business and fully implement the Direct model Changes are on a comparable basis All notes on page C20 C10 Investor day Property & Casualty AXA Direct December 4, 2013

11 We are turning around the UK operations UK Direct in 2011 Below average pricing capability Above average expense ratio Lack of focus on cross selling opportunities Weak profitability We have tackled these challenges Pricing improvement with more sophisticated credit scoring and new burning cost model More efficient claims processes in identifying bodily injury claims, speeding up third party contacts and organizing recoveries Expense savings through FTE reduction and zero based budget Focus on customer value with active up-sell and cross-sell initiatives Gross Revenues Current year combined ratio 110.0% 104.9% 104.8% 102.7% In Euro million Direct book cleaning Market softening Underlying Earnings In Euro million FY11 1H13 FY11 1H13 C11 Investor day Property & Casualty AXA Direct December 4, 2013

12 Today s key messages Unique global Direct franchise based on a low cost strategy already delivering in 9 markets Leveraging our newly developed key assets across the AXA Group C12 Investor day Property & Casualty AXA Direct December 4, 2013

13 Direct is at the heart of the Group s digital strategy A win-win strategy with AXA: A high tech low cost platform which gives other AXA businesses a competitive advantage in their digital transformation journey 1 Web-enablement / excellence Pricing sophistication Pricing sophistication Innovation Underwriting capabilities 2 Customer intelligence & acquisition AXA DIRECT No cannibalisation with other distribution networks AXA GROUP New technologies Digital insight 3 Low-cost Operating model Funding and investments AXA standards (Risk Management, underwriting ) Efficient and streamlined operations C13 Investor day Property & Casualty AXA Direct December 4, 2013

14 Starting to build AXA France multi access offer on Direct Assurance products AXA Direct Low cost direct offer AXA France Clic n go Multi access offer Technological / web / call center expertise Product suited for web clients Underwriting / pricing process based on online questionnaire Claims optimization C14 Investor day Property & Casualty AXA Direct December 4, 2013

15 The Chinese market will further broaden AXA s Direct horizon Passenger car sales volume World s #2 motor insurance market in 2012 with 24% GWP growth p.a. on average over the past 8 years In million 21.7 Low penetration of the P&C market: 1.3% of GDP vs 3.1% of GDP for the Eurozone Source: Swiss Re, sigma No 3/2013 USD 8.2 trillion GDP in billion inhabitants Source: World Bank E 2020E Motor GWP in China Direct Motor GWP in China In Euro billion 113 In Euro billion E E E 2020E Source: McKinsey China Motor Insurance Industry Report C15 Investor day Property & Casualty AXA Direct December 4, 2013 All notes on page C20

16 Direct channel is at the heart of Tian Ping 1 strategy with ca. 20% of premium in 2012 AXA will become the 1 st foreign player in China with a pan- Chinese footprint In Euro million Historical new business revenue growth Fast-growing entrepreneurial insurer st player to enter the Direct market in China Among the first 3 insurers with a national telemarketing license Quasi-pure motor player (99% of GWP) FY06 FY07 26 branches FY08 57 sub-branches 2 telemarketing centers 5,000 employees FY09 FY11 New business distribution mix More than 2 million motor clients 65% GWP EUR 0.4bn FY15E 20% 15% Direct Agents Dealers Ca. Euro 300m to be invested in the next three years C16 Investor day Property & Casualty AXA Direct December 4, 2013

17 We will implement Direct strategy in China while pursuing the development of other channels Implement Direct 3 pillar strategy with a target of 80% direct premiums by 2020 Leverage Direct channel to distribute non-motor products like health and personal accident and reinforce commercial lines across all of China Leverage P&C distribution agreement with HSBC across all of China Further develop partnerships with car dealers C17 Investor day Property & Casualty AXA Direct December 4, 2013

18 Today s key messages Unique global Direct franchise based on a low cost strategy already delivering in 9 markets Leveraging our newly developed key assets across the AXA Group C18 Investor day Property & Casualty AXA Direct December 4, 2013

19 C19 Investor day Property & Casualty AXA Direct December 4, 2013 Q&A

20 Notes Page C4 1. Direct Line Group s premiums of GBP 3,990.6 million in 2012 (2012 Annual report). Admiral s premiums of GBP 1,748.7 million in 2012 (2012 Annual report) 2. Or Euro 2.4 billion including Tian Ping s direct share of total revenues and Ergo Daum Direct 3. Including Swiftcover and AXA Direct Page C5 1. In GWP terms, based on 1H13 market data from local regulators and insurance associations Page C9 1. Direct Assurance + 50% of Natio 2. Belgium, France, Italy, Poland, Portugal, Spain 3. Excluding UK Page C10 1. Direct Assurances + 50% of Natio 2. Including Ergo Daum Direct Page C15 1. Based on McKinsey China Motor Insurance Industry Report numbers and CAGR Page C16 1. Transaction pending, subject to customary closing conditions C20 Investor day Property & Casualty AXA Direct December 4, 2013

21 Biography Stéphane Guinet Stéphane Guinet was appointed as Chief Executive Officer of AXA Global Direct (AGD) in January 2009, when the decision was made by AXA Group to pull together all the existing Direct businesses across the world and build a global business line. Stéphane is also a member of AXA Group P&C Board and serves on several other AXA Group bodies. Prior to his move as CEO of AGD, Stéphane was COO of AXA MedLA (Nov 2006 till Dec 2008), the region covering all intermediated businesses of AXA Group from Dubai to Mexico. He joined AXA Group on November Before joining AXA, Stephane was an entrepreneur who co-founded and led 2 successful ventures : Assurland.com and Prima Solutions. Stéphane Guinet graduated from Ecole Polytechnique. C21 Investor day Property & Casualty AXA Direct December 4, 2013