axa presse 200406 suduiraut cbr va

Claude BrunetTransversal Operations, Communication and Human Resources

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Press Seminar - 10 June 2004 - Page *

AgendaOperational excellenceContextOur answer AXA WayThe benefits of being a global GroupAXA ModelExamples

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Strategic contextProduct Innovation Strive For Operational ExcellenceTo Get On The Podium Locally Primarily InDrive Revenue Growth, Margins and ProductivitySuperior Value Creation For All StakeholdersUnderwiring, Pricing, Claims Management, Investment PerformanceDistribution ManagementQuality of ServiceProductivityLeveraging Group Resources and Human Capital

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The context, productivityOver the last 30 years, the gap between productivity gains in the manufacturing and financial services industries has widened considerably

Financial Services has significant potential for productivity gains

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The context, quality of serviceAXAs customer satisfaction index is 53Another service quality indicator is the number of defaultsThe quality of service is satisfactory but there is still room for improvement

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Operational excellence at the heart of our strategy

Operational excellence has a direct impact on our five priority areasProduct Innovation Underwiring, Pricing, Claims Management, Investment PerformanceDistribution ManagementQuality of ServiceProductivityAnd contributes to the implementation of our Low Cost & High Value for clients operating model

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Why this approach?Fact-based methodAnalysis of the processes of the enterpriseMeasurement of performanceCustomer-orientedThe Voice of CustomersEmployee ownership and responsibilityEach employee contribute to the improvement of the processes he works forContinuous improvement of the performanceCustomer and Performance cultureAXA WayThe way to operational excellence



An industrialised approach to process control

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Example N1, Distribution: motor underwriting and IT assistance for agents (Italy)The Problem: Agents complained that motor underwriting & IT assistance was only available 40% of the timeThe Customer Expectation:High level of availability of IT assistanceThe 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

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Example N2, 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 serviceTotal assets at risk $3.4 billionThe Customer Expectation:Re-assignment in less than 7 daysThe Solution:Transform administrative process to a more functional, easy-to-use decision toolAllow Branch Managers easier access to customer lists ranked by value to AXA by each field associateProvide Branch Managers with MIS/tracking toolThe Benefits:Lower time to re-assign customers : over 70%Improve attrition by 22%Project impact: $560 k over 12 months

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Example N3, Quality of Service: car policy renewal (Germany)The Problem:Low conversion rate on quotation requested by customer at its insurance policy renewalThe Customer Expectation:Quotation at home within 3 daysThe Solution:Redesign the required quotation process The Benefits:Quotations sentQuotations sent within 3 daysConversion rate236 792100 %27 %210 72236 %16%20022003ProjetAXA Way(+ 12 %) (+ 178 %)(+ 69 %)

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AXA WayAn approach focused on our business

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AXA WayProcess improvement

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AXA WayWhere are we today?Current status (end of February)Approach launched in 18 companies (83% of Group revenues)413 projects launched and 159 closed to date234 Black Belts trained and operational4000+ persons sensitized to AXA Way Proven added value and potential for those who have put it into practiceUnderstood and accepted by key stakeholders

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AXA WayWhere do we go?Phase 1Awarenessand launch

Process Improvement

prove the added value with initial successesPhase 2Competenceand confidence

Process Management

rollout across the operations

Phase 3Comfortand control

Process Design

Continuousimprovement Mid 2004Rollout and Involve employees20062002

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Local versus Global: which model for Financial Protection?Convergence with added value Reduce costsFaster implementationReduce risksStatutory & legal constraintsDistribution modelsMarket maturityLocal implementationScale effectExpertisesRichness of experiencesTransversal optimisationFind the right balanceaccording to the domain

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The AXA model : everything is decentralized butGroup is monitoringWe are sharingCapital Allocation

Top Executives Management

Brand Management

Values

Definition of AXA Standards (KPIs)Specialized UnitsAsset managementIT Service/Solution DeliveryReinsuranceCorporate InsuranceRun-off managementOff-shoreSupport functionsOperational ExcellenceProcurementRisk ManagementAXA UniversityNetworking

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AgendaOperational excellenceContextOur answer AXA WayThe benefits of being a global GroupAXA ModelExamplesIT Service Delivery, AXA Tech

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AXA Tech a global company for service delivery within AXAClient Base: 17 AXA Companies in 11 countries in 3 regions2,179 Employees and contractors Worldwide2003 budget: 642 Million EurosAustraliaCanadaJapanU.K.GermanyFranceBelgiumItalySpainNetherlandsU.S.NorthAmerica /Asia PacificEuropeSouthEuropeNorth

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Cost savings of around 20% in two yearsAXA Tech* Expenses 2001-2003Million Euros01002003004005006007008009002002

2003

2001Baseline*incl. Holding and on a comparable basisBusiness ProjectsOperations

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Rationalization of the infrastructure

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Global dealsGlobal Network : FT-Equant

IBM for Infrastructure on demandTransform fixed cost into variable costsGo from 8,000 servers to 2,000

Dell, Global Desktop Standardization Program (Hardware and Services)

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AgendaOperational excellenceContextOur answer AXA WayThe benefits of being a global GroupAXA ModelExamplesReinsurance, AXA Cessions

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AXA Cessions, Six activities to protect the Group and improve the technical performanceOptimisation of Economic Capital / Reinsurance

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Risk transfer - general principlesSub 1Sub 2Sub 3Axa CessionsGross premiums350 MPoolTransformationDirect Retrocessions 65 MSubsidiaries define their protection and place all their reinsurance to the PoolGroup Covers 165 MRetention120 M

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AgendaOperational excellenceContextOur answer AXA WayThe benefits of being a global GroupAXA ModelExamplesProcurement

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Procurement - a strategic functionLower costs:The Procurement team must strongly contribute to the cost reduction Group programSupport the business: Procurement have to negotiate not only the best prices but also the best serviceSecure 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 suppliersAXA is incorporating economic, social and environmental practices in Request for Proposal and contracts commitmentsAXA 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)



Back in 2000, procurement was handled locally

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Today, our approach is globalGlobalization is the only way to get BEST PRICES from the Best suppliers in consolidating volumes and negotiating global contractsPosition the AXA Group as a key and preferred customer Set up a Group Procurement team at the Headquarters Set up in each main company a centralized Procurement organizationWork as a network at worldwide level

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Professionalism, another advantage of globalisation Share experiences and expertiseUse 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 performanceGuaranty in all AXA companies the same high level of transparency and integrity

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As a result of the already-signed contracts, AXA saves between 100-200 M annually, a part of which go to AXA Tech.Global Contracts signedAdditional savings opportunitiesAXA works with industry leaders under a global contractual approach bringing strong benefitsService/productRegistered savingsService/productExpected savingsTravel10%Premises6%Professional services15%Office printing20%Desktop systems15%Professional services/IT15%Telecommunications25%Car fleet10%Software5%Damage restoration3%Infrastructure on demand10%Glass breakage15%Office supplies15%

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AgendaOperational excellenceContextOur answer AXA WayThe benefits of being global GroupAXA ModelExamplesTop executives management, a new leadership

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How we behave will be the primary and main driver of AXA will performancein 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 employeeswe are leading References: Daniel Goleman, Richard Boyatzis, Charles OReilly, Annie McKee, Ed Schein, and many others

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Which leadership for superior execution? Product Innovation Strive For Operational ExcellenceTo Get On The Podium Locally Primarily InDrive Revenue Growth, Margins and ProductivitySuperior Value Creation For All StakeholdersUnderwiring, Pricing, Claims Management, Investment PerformanceDistribution ManagementQuality of ServiceProductivityLeveraging Group Resources and Human Capital

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Deepen AXAs current leadership modelTo deliver todays performanceandTo build a legacy for future performance

Build our organizationsFocus on customersStretch performance Collaborate with others Lead by example

leadership challenges

Professionalism InnovationPragmatismTeam spirit Integrity

AXA Values

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AXA leadership management toolsLEADERSHIP Development360 Feed-backCompetency-based selectionCareer ManagementOrganization and Talent ReviewsExecutive compensationEmployee surveys (Scope)Leadership Development ProgramsPerformance Appraisals

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Thank you / Questions?

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axa presse 200406 suduiraut cbr va

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