AXA’s CEO on Insurance as a Tool to Drive Positive Impact

When I left management consulting in 2005 to take a job at AXA, one of the world’s leading insurers, my friends chided me for what they viewed as a questionable career move. “Why do you want to work in such a boring industry?” they asked. But having done research on credit risk for my PhD, I’m fascinated by the business of insurance. While some view it as a bureaucracy designed to simply track and pay claims, I see a much deeper purpose: to help people, companies, and societies thrive by distributing risk. Thus insurers (and their investment arms) are important vectors for positive change in the world.

Two decades later, as the CEO of AXA, I’m even more confident in that opinion. As systemic risks—climate change, geopolitical instability, public health crises, and social tensions caused by economic inequality—present new challenges, our company and its competitors have a big role to play in protecting against them.

One path for our industry could be to become an exclusion machine—refusing, for example, to insure against hurricanes and wildfires, or chronic diseases and epidemics, or war and cyberattacks—thereby narrowing our client base and our relevance. But another option is to use the power of our underwriting and investments to promote individual and corporate behaviors that drive collective resilience in the face of the world’s most pressing environmental and social issues.

At AXA we are moving swiftly in the latter direction—and hoping to set an example for others. We are doing so by rebalancing our portfolio toward businesses and risks that require best-in-class expertise and servicing to make a real difference; reimagining our relationships with customers so that they will think of us not simply as a payer but as a partner that uses all our data, technology, and expertise to help them avoid risks; and reorganizing our operations to promote a more entrepreneurial culture and talent pool so that we can keep finding new ways to live into our mission.

Taking the Long View

Long-term thinking is in AXA’s DNA. In its 40-year modern history I’m only the third CEO. Previously known as Ancienne Mutuelle and then Mutuelles Unies, the company was rebranded as AXA in 1985 under the leadership of Claude Bébéar, the founder of the group. Over the next decade it established itself as a major player beyond France, in the rest of Europe, the United States (with its 1991 acquisition of Equitable), Asia, and Australia. Claude felt strongly that the organization should not just insure and invest but also drive positive impact across the communities where it operates. His successor, Henri de Castries, who took the helm in 2000, also oversaw international expansion—to Latin America, Africa, and additional Asian markets—and the shoring up of our group-level functions, including risk management and HR. Henri, too, believed that AXA could use its power and reach for good. In fact, among his final decisions as CEO, in 2015, were to divest from coal—a shift of €200 million across our portfolios—and commit to investing €3 billion in green technologies over the next five years.

I first came to AXA to head up distribution of our Swiss business. I knew it was a company and an industry in which I could build a meaningful career. Though I decamped for a short period to assume senior roles at Winterthur (which was later acquired by AXA) and Zurich Insurance Group, I returned in 2012 to lead AXA’s Germany division. Three years later I was appointed CEO of our global health business. In early 2016 I also took responsibility for our life-and-savings line.

By then Henri and AXA’s board were deep into long-term strategic planning and a CEO succession search. They recognized that the company would need to make a transformative shift to adapt to a more uncertain environment and the need for increasing protections related to climate change, public health issues, and technology.

As a candidate for the top job, I was initially seen as too young, too German, and too much of an outsider, owing to my stints at other companies. But the leadership team ultimately recognized the vision I had for making AXA an insurance company that would drive both profitability and positive impact for our clients.

When I stepped into the CEO role, in June 2016, my first priority was to visit each of our businesses and listen to what the people running and working in them, and their customers, had to tell me. I asked about strengths and weaknesses, opportunities and challenges. I also organized two simultaneous workshops—one with senior leaders and one with junior talent—and tasked each group with discussing what we should change in the company to improve it. My goal was to draw on their collective wisdom.

Next we made the aforementioned key changes: transitioning to higher-return, higher-impact businesses and geographies; partnering more effectively with our customers; and emphasizing entrepreneurialism in our ranks.

Rebalancing Our Portfolio

In the low-interest-rate environment we faced in 2016 and expected to deal with for the foreseeable future, it was immediately clear that we needed to diversify the company’s portfolio by moving from predominantly life-and-savings exposure toward more property and casualty underwriting. We also felt that property underwriting, particularly in commercial lines, would bring greater client engagement and an opportunity to realize our vision of helping businesses reduce their environmental risks, costs, and impacts. And medical insurance would allow us to reward healthful habits. In 2018 we launched the rebalancing by taking our U.S. life-and-savings business public and then ramped up in property and casualty by using the spinoff proceeds to help finance the acquisition of a leader in that sector: AXA XL. Though Wall Street analysts were skeptical about the high purchase price, and we had to rewrite much of XL’s portfolio, the business became a major contributor to our earnings within a few years and has favorably shifted our ratio of financial-market risk to technical insurance risk from 80:20 to 20:80.

Another realization I came to early in my tenure as CEO, after meeting with our teams around the world, was that we needed to focus our geographic footprint. Sixteen markets accounted for 94% of our profits. The 20-plus that accounted for the remainder had more risks and few investments available to increase their market share. Though AXA had a tradition of international expansion, I knew we could not execute our new strategy everywhere. When I brought all the country chiefs to headquarters to explain the problem and discuss solutions, they understood. We left 22 markets, focused our investments, and streamlined the organization to give more accountability to local CEOs, which has allowed us to both attain greater efficiency and focus on achieving greater impact in the countries we still serve. In the years since, our emphasis has been on providing distinctive risk management, data, and services to our customers, which today are 50% retail and 50% commercial.

We have been particularly active in areas with major societal challenges such as threats to health, cyber risk, and climate change. On the investment side, we tend to stay away from certain sectors, including coal and tobacco, and to allocate significant resources—a planned €5 billion a year—to ESG leaders and companies that are actively transitioning to low-carbon and environment-positive business models.

Our insurance teams work with corporate customers to support and accelerate their sustainability work—in particular adaptation to climate change—with training and consulting. Our industry has a key role to play in “de-risking” the climate transition. That means insuring green assets, such as electric vehicles and renewable energy, or participants in the circular economy, which will trigger more environment-friendly behaviors. This is a challenge, because the risk patterns and data for this new economy are not yet fully known, but it also represents a great opportunity for us and our clients. We have therefore set a goal of putting €6 billion toward these offerings.

Our asset management firm, AXA Investment Managers, will be sold to BNP Paribas in the summer of 2025 as we continue to streamline operations. But while under our umbrella, it has continued to prioritize investments with strong ESG records. A founding member of the Net-Zero Asset Managers Initiative—a coalition committed to supporting net-zero carbon trajectories among its members by 2050—it rates all companies in which it does or might invest as leaders, transitioners, or laggards; pressures management teams on their plans; and divests from those that don’t hit benchmarks over a three-year period.

Partnering with Customers

In 2020 I and the rest of the team at AXA crafted and released a new purpose statement: “To act for human progress by protecting what matters.” We reaffirmed our core principles (courage, integrity, customer-centricity, and a unified culture) and clarified our vision and intention: to move from payer to trusted partner. To do so we would deliver new services and build new business models to increase customer protection.

Claims paying is still a core function for AXA, but we also want to help people and companies avoid or minimize risk and thus claims and high costs. For example, our property insurance policies incentivize customers to invest in and track energy-efficient improvements. Our employer-based and individual supplemental health lines offer preventive care. Our auto insurance policies include reduced premiums for electric and hybrid vehicles and for safer and less frequent drivers (as tracked through telematics). In addition to covering claims for repairs, they often include car pickups and loaner vehicles. We see huge opportunities for innovation and growth in creating ecosystems of data and services to support risk prevention and mitigation for our customers.

In recent years we have launched two initiatives to help us deepen our partnerships with different types of customers. Our Digital Commercial Platform integrates information from across AXA’s entities and insured properties, including real-time analytics via networks of satellites, drones, and sensors. It has created a repository of data to help customers better assess, monitor, predict, and prevent risks. AXA Climate, a startup inside the company, is working with an in-house team of scientists to better understand the economic risks of global warming and with large companies on their adaptation to climate-change strategy and internal trainings.

Eventually we want to scale up both platforms so that network participants can collaborate on solutions to the problems they share. That will allow us to become orchestrators and facilitators of a community of customers that are helping one another build stronger, more sustainable businesses; lead better, healthier lives; and see more potential than risk in our collective future.

Like many other companies, we gauge the success of our customer strategy using Net Promoter Scores and surveys. In 2016 our NPS was 2 and customers across many of our entities reported below-average satisfaction. Today it’s 40, and every AXA business line and market boasts average or above-average satisfaction.

Emphasizing Entrepreneurialism

As we rebalanced our portfolio and developed stronger partnerships with customers, our talent pool and culture had to shift in tandem. We needed to recruit, unleash, and foster more entrepreneurial energy to deliver on our goal of building business lines that advance ESG progress. To do so, the leadership team agreed on a program we called “simplicity and empowerment,” which involved adjusting accountability between the head offices teams and the people running AXA’s various entities—those who have the customer relationships and see the real-world challenges that must be overcome in various industries and markets. We started encouraging employees to be courageous and dare to try new things. Managers have been told to focus less on driving incremental performance and more on creating an environment that allows their teams to be creative and successful. As a result of this new approach, and of our recommitment to purpose-led strategy, we’ve seen higher employee engagement and an increase in profits averaging 30% across the organization.

One big area of socially responsible innovation has been our Emerging Customers group, which we launched in 2016 as a way of addressing a pressing societal need: insurance for mass-market and low-income customers in the developing world who can’t afford traditional policies but earn too much to fall into social safety nets. In many countries this group of self-employed, migrant, and blue-collar workers; small and medium-size enterprises; farmers; and women makes up 65% to 80% of the population. So we must explore simpler, more flexible products and new modes of distribution, including nonprofits and NGOs, mobile operators, postal services, digital financial services, e-commerce platforms, small-merchant networks, remittance companies, local banks, and agricultural cooperatives. AXA now insures 14 million customers in this business line; we want that number to be 20 million by 2026.

Emerging Customers is a model that can be adapted for other areas of what we call “inclusive insurance”: coverage for health conditions such as chronic diseases and for people and businesses that are typically underinsured even in more-mature economies, such as contract and gig workers and micro-enterprises. Offerings might include auto, home, and health insurance and, to a lesser extent, savings, retirement protection, and financial services. We see this work not as altruistic but as strategic, because that market is untapped and will help us stay ahead of both regulatory demands and competitive pressures. In all these endeavors our margins will perhaps be thinner than they are elsewhere in AXA. But we will still make money by serving both our shareholders and society.

The energy and enthusiasm for new ideas remain high as AXA enters its fifth decade. At recent offsites we’ve brought together senior leaders and some of our most out-of-the-box thinkers to talk about other serious problems we might help to address—from aging populations and increasing social isolation to mental health crises and obesity—by pushing individuals and companies to better manage the drivers of them. We’re already using artificial intelligence to streamline and accelerate the more routine aspects of our work, such as evaluating new customers and claims, so that we can focus on bigger challenges.

I believe that AXA’s success over the past few years proves that insurers and their investment arms can be a force for good in the world. It took significant work to rebalance our portfolio, cultivate partnerships and influence with customers, and build entrepreneurial capabilities within our organization. But the work has paid off by both reviving growth across our businesses and making a difference in our customers’ lives at a time of great crises and uncertainty.