Ankita Sharma Aravind Ayyaswamy Dileep Kumar Gaurav Gupta Jasleen Kaur Marwaha

INTRODUCTION
1816 - French based Company started by Jacques- Theodore le Carpentier and 17 other entrepreneurs. Started as Mutuelle Contre de lAssurance Contre IIncendie (MCI). 1847 - MCI decided to diversify its activies. So they created two companies Mutualite Immobiliere & Mutalite Mobiliere. 1881 Both companies merged to form Ancienne Mutuelle (AM). 1922 AM offered automobile insurance under then name of AM Accidents. 1946 Companys 1st merger AM du Calvados. 1972 & 1974 Death of Andre Sahut dlzam & strike hit AM.

 1978 Remnamed the company to Mutueles Unies (MU). At the same time accquired Compagnie Parisienne de Garan tie. 1982 MU took over Drouot Group and Bebear was appointed as Chairman and CEO of merged entity named Mutuelles Uies Drouot (MUD). Became the largest non state owned insurer in France. 1985 MUD changed its to AXA. 1986 AXA acquired Le Providence & Le Sccours. 1988 AXA & Compagnie du Midi merged their insurance business. They got listed in Paris Stock Exchange. 1989 AXA acquired controlling equity stake in Compagnie du Midi and became 2nd largest player in French Insurance market. Companys revenue grew from 1.4 billion Euros to 7.3 billion Euros. They had 42 subsidiaries across the world.

 1991 They formulated a vision of becoming a global company. Revenue was 8.1 billion Euros with France accounting 60% and Rest of Europe with 30%. They acquired majority stake in US based Equitable Assurance (EA was the 3rd largest insurer in US). AXA invested USD 1 billion in the acquisition as they also acquired the subsidiaries Donaldson, Lufkin and Jenrette. 1994 AXA acquired Boreal Assurances for USD 120 million. It became the 4th largest insurer in Canada. 1994 They acquired Victoire Belgium. AXA Management services was incorporated in Europe.

 1995 AXA acquired 40% stake in National Mutual Life Association of Australia for USD 840 million (2nd largest in Australia), New Zealand and Hong Kong). 1996 Listed in New York Stock Exchange (NYSE). They announced a merger with UAP. It made AXA, 2nd largest insurer in the world. UAP was taken over by AXA for USD 9 billion stock swap. 1999 AXA acquired Guardian Royal Exchange group for 1.5 billion Euros. With this, AXA became 3rd in UK non-life insurance market. AXAs US Business was renamed as AXA Financial Inc. They also formed an alliance with Nippon Dantai, 13th largest domestic life insurer in Japan.

 2000 Bebear became the Chairman of ACA Group Supervisory Board and Henri de Castries became the Chairman of AXA Group Management Board. Constantly evaluated the business portfolio to divest from loss making businesses and those did not fit in the objectives. 2000 AXA sold the majority owned investment-banking subsidiary, Donaldson, Lufkin & Jenrette Inc. for USD 8 million. 2002 AXAs total revenues were at 74.7 billion Euros and net income 949 million Euros. They involved in several line of business ranging from Motor insurance to property & casualty insurance. 2002 Life & savings segment accounted for 65% of total premium. Property & Casualty segment for 21%. International Insurance segment for 8%.

AXA Board
To achieve the objective of becoming a global company, there were several management issues like cultural, communication, legal, capital allocation and integrating people and processes. They had to take care of statutory, regulatory, legal and accounting & tax systems as they varied from country to country. In order to reduce to complexity, they introduced a single business model of financial protection. AXAs services included asset protection, life protection, investment savings, asset accumulation, retirement annuities and estate planning. They focused on organic growth by retaining existing customers and acquiring new ones. 2003 They planned to maintain a balance between centralization and decentralization to reduce complexity.

Cylinders of Growth Priorities to Achieve Operational Excellence

Product Innovation Core Business Expertise Distribution Management Quality of Service
A differentiation factor which offered value addition.
Offer best service at best price. Lessen administrative load and enhance sales performance.

AXA Employees Champions of Operational Excellence.

Reduce operating cost & improve quality every year.

Productivity

Supervisory Board Responsible for the management of AXA Board & accountable to the shareholders.

Appointed by the Chairman & members of the management board. Stock repurchase, acquisitions of companies worth over 500 million Euros, strategic partnership, dividend payment etc Required consent of the board. Met at least five times a year and discussed issues pertaining the groups operation, stock report, strategies etc. Company shares were provided to the board which was equal to the annual fees of the directors. Four special purpose committees were formed and members were elected to handle these committees. Committees Audit, Finance, Compensation & Selection and Governance.

Management Board
Decision making body with its members dedicating their time to managing the company. Meetings were held weekly to discuss strategy and operations of the group.

Appointed by the supervisory board and they were to handle specific functions.
10 Business units were created which was headed by a CEO. Executive committee was created to review and execute AXAs strategy.

Business reviews were conducted by the Executive committee which consisted of two parts Meetings between the management board and the business unit members and meetings between the business unit members and the supervisory board members. Business Support Development (BSD ) teams were created. They reported to the management board on key projects being considered at the Business Units.

 At HQ, functions which were centralized were the corporate strategy, brand management, some key processes and standard Key Performance Indicators (KPIs). Capital allocation were centralized to minimize cost of capital and ensure financial strength. Risk management was also centralized.

Key Performance Indicators

Customers
Market Share Net Cash Flows Client Satisfaction

Employers
Scope result employees Scope result agents

Shareholders
Combined ratio Present value of future profits in life Life and savings costs/income ratio

Stakeholders
Implementation of AXA Way

AXA Asia Centrally Managed Functions

Corporate Office
Financial Reporting

Business & Distribution

Retail Business Health Business

Regional Management Service

Actuarial Claims Finance Human Resources Process & IT Reinsurance Project Management Communications

Corporate Planning & Development

Commercial Business Distribution & Marketing

Internal Audit

Objectives of Procurement
Lower Costs
The procurement team must contribute to cost reduction.

Support the Business

Procurement team has to negotiate for best prices and services.

Secure Delivery
The business must get what is has requested for : Procurement is also responsible for implementation of the contract.

Develop sustainable and ethical relations with suppliers

Maintain excellent relationship with the suppliers by adhering to a set of clearly defined procurement guidelines and promoting ongoing dialogue.

 2004 Due to centralization of procurement, they were able to save 100 million Euros. 2005 They had 115 regional and global contracts. Savings due to centralized contracts Telecommunications 25% Office Supplies 15% Professional Services 15% Desktop systems 15% Travel 10% Infrastructure on demand 10% Software 5%

Leverage AXAs global scale to reduce groups annual IT operations spending. Improve operational effectiveness. Deliver consistent high quality service Become business enabler.

AXA tech managed over 600 million Euros in IT budgets of the group. Since 2001, They were able to achieve annualized 160 million Euros. By 2007, they planned to expand scope of AXA tech to cover all companies.

AXA Efforts to Decentralize

AXA implemented good corporate governance across the group. All subsidiaries were governed by a board, which included nonexecutive directors. Audit committee oversaw the functioning. All subsidiaries prepare 3 year forecasts. They have critical review to make the forecasts better. Company believed that the employees are the most valuable assets and to achieve global standards, it has to motivate the employees. They encourage best practices to employees in professionalism, innovation, pragmatism, team spirit and integrity. They provided equal opportunities in hiring, pay and promotion to all employees. Subsidiaries have their own local strategies. These were necessary because local laws, practices and distribution models guided insurance companies.

 AXAs subsidiaries launched products that were in demand in their local markets. Products were designed to keep customers need in mind. All subsidiaries were free to have their own distribution practices. 2003 AXA had a central risk management department with 50 employees and local risk management departments with 200 employees. Focus of risk management department asset liability management, profitability of the product, reserving policy & reinsurance strategy, information system & modernization and managing operational risks. Risk management department submitted an annual report to the supervisory board, management board and to the audit committee.

AXA Strategic Plan

Strategic Imperatives
Profitable new business growth Negative spread management Increase customer retention Manage our costs Asset allocation management Improve our service levels Be an employer of choice

Strategic Programs
Distribution Products Technical & Investment Margins Customers service & Operational Efficiency HR Infrastructure Enhancements Regulatory compliance & others

Key Performance Indicators (KPIs)

New Business Negative Spread Policies Profitable Policy S&L rate Economic Expenses Return on Investment Customer Satisfaction Employees Satisfaction

 They reaped several benefits by striking balance between centralization and decentralization. They had firm control over some of the most important activities and were able to steer the subsidiaries towards growth. At the same time, the subsidiaries were free to carry out their day-to-day operations. 2004 Acquired Mutual of New York (MONY) for USD 1.5 billion. 2005 They launched Ambition 2012, with the objective for becoming the most preferred company in the insurance industry.