Transcript Diapositive 1 - AXA Group Web Site
Claude Brunet
Transversal Operations, Communication and Human Resources
Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Press Seminar - 10 June 2004 - Page 2
Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Press Seminar - 10 June 2004 - Page 3
Strategic context
Strive For Operational Excellence To Get On The Podium Locally Primarily In Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Leveraging Group Resources and Human Capital Productivity Drive Revenue Growth, Margins and Productivity Superior Value Creation For All Stakeholders
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The context, productivity
Over the last 30 years, the gap between productivity gains in the manufacturing and financial services industries has widened considerably
250 US manufacturing US finance, insurance & real estate 200 150 100 1970 1975 1980 1985 1990 1995 2000
Financial Services has significant potential for productivity gains Press Seminar - 10 June 2004 - Page 5
The context, quality of service
AXA’s customer satisfaction index is 53 Another service quality indicator is the number of defaults Defaults 0 out of 10 1 out of 10 2 out of 10 3 out of 10 4 or more out of 10 Group level in 2003 The quality of service is satisfactory but there is still room for improvement Press Seminar - 10 June 2004 - Page 6
Operational excellence at the heart of our strategy
Operational excellence has a direct impact on our five priority areas Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Productivity
And contributes to the implementation of our “Low Cost & High Value for clients” operating model
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Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Press Seminar - 10 June 2004 - Page 8
AXA Way The way to operational excellence
Why this approach?
Fact-based method Analysis of the processes of the enterprise Measurement of performance Customer-oriented The Voice of Customers Employee ownership and responsibility Each employee contribute to the improvement of the processes he works for Continuous improvement of the performance Customer and Performance culture Press Seminar - 10 June 2004 - Page 9
An industrialised approach to process control
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Example N °1, Distribution: motor underwriting and IT assistance for agents (Italy)
The Problem: Agents complained that motor underwriting & IT assistance was only available 40% of the time The Customer Expectation: High level of availability of IT assistance The Solution: Implement a web-based tool for issuing requests; Requests can now be monitored and prioritized.
The Benefits: Quality Improvement: Availability is increased to 99% Productivity improvement: no added resources assigned to the process.
Project impact: €150 k over 12 months Press Seminar - 10 June 2004 - Page 11
Example N °2, Quality of Service: re assignment of “orphan” customers (US)
The Problem: Increase in the attrition when an associate terminates with AXA due to a lower quality if service Total assets at risk $3.4 billion The Customer Expectation: Re-assignment in less than 7 days The Solution: Transform administrative process to a more functional, easy-to-use decision tool Allow Branch Managers easier access to customer lists ranked by value to AXA by each field associate Provide Branch Managers with MIS/tracking tool The Benefits: Lower time to re-assign customers : over 70% Improve attrition by 22% Project impact: $560 k over 12 months Press Seminar - 10 June 2004 - Page 12
Example N °3, Quality of Service: car policy renewal (Germany)
The Problem: Low conversion rate on quotation requested by customer at its insurance policy renewal The Customer Expectation: Quotation at home within 3 days The Solution: Redesign the required quotation process The Benefits: Quotations sent
2002
Projet
2003
210 722
AXA Way
236 792 (+ 12 %) Quotations sent within 3 days Conversion rate 36 % 16% 100 % 27 % (+ 178 %) (+ 69 %) Press Seminar - 10 June 2004 - Page 13
AXA Way An approach focused on our business
Support Others Product development Claims management Distribution and sales Underwriting Policy administration
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AXA Way Process improvement
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AXA Way Where are we today?
Current status (end of February) Approach launched in 18 companies (83% of Group revenues) 413 projects launched and 159 closed to date 234 Black Belts trained and operational 4000+ persons sensitized to AXA Way Proven added value and potential for those who have put it into practice Understood and accepted by key stakeholders Press Seminar - 10 June 2004 - Page 16
2002
AXA Way Where do we go?
Phase 2 Competence and confidence Phase 1 Awareness and launch Process Improvement
prove the added value with initial successes
Process Management
rollout across the operations
Rollout and Involve employees Mid 2004 Phase 3 Comfort and control Process Design
Continuous improvement
2006
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Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Press Seminar - 10 June 2004 - Page 18
Local versus Global: which model for Financial Protection?
Local implementation Transversal optimisation
Statutory & legal constraints
Distribution models
Market maturity
Scale effect Expertises Richness of experiences Find the right balance according to the domain Convergence with added value
Reduce costs
Faster implementation
Reduce risks
…
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The AXA model : everything is decentralized but…
Group is monitoring
Capital Allocation Top Executives Management Brand Management Values Definition of AXA Standards (KPIs)
We are sharing
Specialized Units Asset management IT Service/Solution Delivery Reinsurance Corporate Insurance Run-off management Off-shore Support functions Operational Excellence Procurement Risk Management AXA University… Networking Press Seminar - 10 June 2004 - Page 20
Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples IT Service Delivery, AXA Tech Press Seminar - 10 June 2004 - Page 21
AXA Tech a global company for service delivery within AXA
Client Base: 17 AXA Companies in 11 countries in 3 regions 2,179 Employees and contractors Worldwide 2003 budget: 642 Million Euros Europe South France Belgium Spain Netherlands Italy Europe North Germany U.K.
North America / Asia Pacific U.S.
Australia Canada Japan
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Cost savings of around 20% in two years
AXA Tech* Expenses 2001-2003
900 800 700 600 500 400 300 200 100 0 800 2001 Baseline *incl. Holding and on a comparable basis 746 2002 642 60 582 2003 Business Projects Operations Press Seminar - 10 June 2004 - Page 23
Rationalization of the infrastructure
Infrastructure
Data Centers: # of locations Help Desk Providers Email Systems Supported Print Locations / Facilities # Employees # Contractors
01/2002
13 16 17 10 2,049 402
01/2004
3 5 8 7 1,982 197 Press Seminar - 10 June 2004 - Page 24
Global deals
Global Network : FT-Equant IBM for Infrastructure on demand Transform fixed cost into variable costs Go from 8,000 servers to 2,000 Dell, Global Desktop Standardization Program (Hardware and Services) Press Seminar - 10 June 2004 - Page 25
Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Reinsurance, AXA Cessions Press Seminar - 10 June 2004 - Page 26
AXA Cessions, Six activities to protect the Group and improve the technical performance Risk Analysis Risk Quantification Risk Reduction / Mitigation Re/Insurance Design and Placement Risk Transformation to Maximize Group Size Effect Reinsurance Administration Improvement of the underwriting Optimisation of Economic Capital / Reinsurance
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Risk transfer - general principles
Sub 1 Sub 2 Sub 3 Subsidiaries
define their protection and place all their reinsurance to the
Pool Axa Cessions Gross premiums €350 M Direct Retrocessions €65 M Pool Transformation Group Covers 165 M € Retention 120 M €
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Agenda
Operational excellence Context Our answer – AXA Way The benefits of being a global Group AXA Model Examples Procurement Press Seminar - 10 June 2004 - Page 29
Procurement - a strategic function
Lower costs: The Procurement team must strongly contribute to the cost reduction Group program Support the business: Procurement have to negotiate not only the best prices but also the best service Secure delivery: The business must get what it has requested: the right implementation of the contract is also part of Procurement responsibility. Develop sustainable and ethical relations with suppliers AXA is incorporating economic, social and environmental practices in Request for Proposal and contracts commitments AXA is committed to maintain quality relationships by respecting the code of purchasing conduct (neutrality, fairness, transparency), the terms of payment and ongoing dialogue AXA expects from its suppliers a strong support to optimise services (quality, innovation and productivity) Press Seminar - 10 June 2004 - Page 30
Back in 2000, procurement was handled locally
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Today, our approach is global
Set up in each main company a centralized Procurement organization Set up a Group Procurement team at the Headquarters Work as a network at worldwide level
Globalization is the only way to get BEST PRICES from the Best suppliers in consolidating volumes and negotiating global contracts Position the AXA Group as a key and preferred customer Press Seminar - 10 June 2004 - Page 32
Professionalism, another advantage of globalisation
Share experiences and expertise Use the same processes and the same tools based on Group best practices (ordering system, data warehouse, contract database, …) Apply the same savings calculation methodology in order to be able to benchmark our performance Guaranty in all AXA companies the same high level of transparency and integrity Press Seminar - 10 June 2004 - Page 33
AXA works with industry leaders under a global contractual approach bringing strong benefits
Global Contracts signed
Service/product Registered savings
Travel 10% Additional savings opportunities
Service/product Expected savings
Premises 6% Professional services Desktop systems Telecommunications Software 15% 15% 25% 5% Infrastructure on demand 10% Glass breakage 15% Office printing 20% Professional services/IT 15% Car fleet Damage restoration 10% 3% Office supplies 15%
As a result of the already-signed contracts, AXA saves between €100-200 M annually, a part of which go to AXA Tech.
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Agenda
Operational excellence Context Our answer – AXA Way The benefits of being global Group AXA Model Examples Top executives management, a new leadership Press Seminar - 10 June 2004 - Page 35
How we behave will be the primary and main driver of AXA will performance in the coming years …
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…because how we behave will directly define 60 to 70% of the attitudes and behaviors of the 100,000 AXA employees we are leading
References: Daniel Goleman, Richard Boyatzis, Charles O’Reilly, Annie McKee, Ed Schein, …and many others Press Seminar - 10 June 2004 - Page 37
Which leadership for superior execution?
Strive For Operational Excellence To Get On The Podium Locally Primarily In Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Leveraging Group Resources and Human Capital Productivity Drive Revenue Growth, Margins and Productivity Superior Value Creation For All Stakeholders
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Deepen AXA’s current leadership model
leadership challenges
Build our organizations Focus on customers Stretch performance Collaborate with others Lead by example AXA Values
Professionalism Innovation Pragmatism Team spirit Integrity To deliver today’s performance and To build a legacy for future performance
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AXA leadership management tools
LEADERSHIP Development Performance Appraisals Executive compensation Employee surveys (Scope) 360 ° Feed-back Competency based selection Organization and Talent Reviews Career Management Leadership Development Programs
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