AXA Essay ⋆ Business Essay Examples ⋆ EssayEmpire

AXA is a France-based financial holding company that specializes in financial protection, insurance, and asset management products and services. It has grown to become one of the world’s leading insurance companies, occupying a leading position in France (market share: 10 percent at the end of 2007), the United States (8 percent), and the United Kingdom (7 percent).

The AXA group’s origins can be traced back to the 19th century. In 1817 the fire insurance company Compagnie d’Assurances Mutuelles contre l’Incendie was created in Rouen, France. In 1881 France’s first mutual life insurer, Mutuelle Vie, was founded. In 1946 these two companies were merged by Sahut d’Izarn, then general manager of Compagnie d’Assurances, to create Groupe Ancienne Mutuelle. A number of further acquisitions followed, including Anciennes Mutuelles Accidents and Ancienne Mutuelle de Calvados in 1946, Ancienne Mutuelle d’Orleans in 1950, and Mutualité Générale in 1953. Under d’Izarn’s disciplined management style, Groupe Ancienne Mutuelle prospered during the 1960s and 1970s and was renamed AXA in 1985.

By 2007 AXA was generating revenues in excess of €90 billion per year and employed over 150,000 salaried employees and distribution agents in a total of 47 countries across Europe, North and South America, Africa, the Middle East, and the Asia Pacific region. The company had over 52 million clients around the world.

In 2008 the company had four operating business segments. The life & savings division accounts for roughly two-thirds of company revenues. It offers a range of life and savings products, including individual and group savings retirement products, life, and health products. Products offered by the property & casualty segment include mainly motor, household, property, and general liability insurance for both personal and commercial customers. The segment generates around a quarter of the company’s total revenues. The company’s remaining revenues are split between its asset management and banking activities (the latter conducted primarily in France and Belgium) and its international insurance division, which offers large national and international corporations insurance products to cover the large risks associated with property, transportation, and financial projects.

The recent growth and success of AXA has been attributed to Claude Bébéar, one of the most highly regarded business leaders in France. Bébéar joined Groupe Ancienne Mutuelle in 1958. Early in his career, he was singled out by d’Izarn as one of his potential successors. He worked in various company divisions, undertook several international assignments, and served as AXA’s chief executive officer from 1985–2000. He remained chairman of the supervisory board until 2008.

Bébéar brought a North American management style to the once-genteel practice of business in France. Bébéar pushed AXA to focus not only on organic growth but to expand its operations through a combination of acquisitions and direct investments, which were funded primarily through proceeds earned from the sale of non-core businesses and assets and new share issues.

Under Bébéar’s leadership, AXA listed on the New York Stock Exchange in 1996 and embarked on a strategy of acquiring and building up businesses in new markets and re-branding them under the AXA name. Notable acquisitions included Equitable Life (1992), National Mutual Holdings (1995), Compagnie UAP (1997), Guardian Royal Exchange (1999), Nip-pon Dantaï Life Insurance Company (2000), Sterling and Ipac Securities (2002), the Winterthur Group (2006), and MLC Hong Kong (2006).

Bébéar retired from the Supervisory Board in 2008, but continues to push for economic reforms in France through the Institut Montaigne, an independent think tank that he founded in 2000 to contribute to debates surrounding the major economic and political issues facing contemporary France.

In the post-Bébéar period, concerns have been raised that, despite its international expansion strategy, the group generates too high a share of its total revenues in mature markets. By concentrating its business activities in France, the United States, the United Kingdom, Germany, and Japan, AXA is potentially missing out on opportunities to expand in the emerging financial markets of, for example, China and Brazil, which financial analysts consider to have stronger growth potential. Bébéar’s successor, Henri de Castries, now faces the challenge of spreading AXA’s revenues more effectively over different geographical markets and providing the group with the stability to shield itself from demand fluctuations in established markets.

Bibliography:

Claube Bébéar, Le courage de reformer [The courage to reform] (Editions Odile Jacob, 2002);
Datamonitor, AXA (Datamonitor, 2007);
Bertrand Venard, “The French Insurance Market: Background and Trends,” in Handbook of International Insurance, J. David Cummins and Bertrand Venard, eds. (Springer, 2007).

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