AXA – on demand AXA 2025 Muenster Consulting
Description: AXA on demand AXA 2025 Muenster Consulting presenting to the upper management board of AXA Muenster Consulting Agenda 2 Management Summary Carolin 3 Key Issues Management Summary Analysis Implementation Finance Conclusion Easy market
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slide1. AXA – on demand AXA 2025 Muenster Consulting presenting to the upper management board of AXA Muenster Consulting<br>
slide2. Agenda 2<br>
slide3. Management Summary Carolin 3<br>
slide4. Key Issues Management Summary Analysis Implementation Finance Conclusion Easy market entry for new customers
Behind in tech trends
High dependency in capital markets<br>
slide5. Key Issues Easy market entry for new customers
Behind in tech trends
High dependency in capital markets How can AXA keep being competitive and transform the health market? 5<br>
slide6. A business model shift is needed Strategy
Shift of core business model
Expansion of digital offer
Acquisition of new customers Outcome
Revolutionize health care system in the Asian market
Increase market share
Benefit reputation 6 Management Summary Analysis Implementation Finance Conclusion<br>
slide7. Analysis Theresa 7<br>
slide8. Axa faces a highly competitive market The trends in the industry is challenging the competitive landscape Wave of Mergers & Acquisitons Impact of technology (AI, IoT, Blockchain) The rise of insuretechs AXA does not only compete with insurance companies but also with banks, asset management companies, investment advisers and other financial institutions Global multi-line insurance majors Strong regional players Digital-first insurtech companies 8 Management Summary Analysis Implementation Finance Conclusion<br>
slide9. Axa forces a highly competitive market The trends in the industry is challenging the competitive landscape Wave of Mergers & Acquisitons Impact of technology (AI, IoT, Blockchain) The rise of insuretechs AXA does not only compete with insurance companies but also with banks, asset management companies, investment advisers and other financial institutions Global multi-line insurance majors Strong regional players Digital-first insurtech companies How can AXA create a unique selling point to outstand the competitors? What should AXA focus on? 9<br>
slide10. Looking ahead, AXA has several decisions to make 10 Management Summary Analysis Implementation Finance Conclusion<br>
slide11. First, focus on the health sector Focus Health Property & Casualty Banking Life & Savings Asset Management Urgency
Customer needs
High growth potential
Lock-in effect possibility Why? 11 Management Summary Analysis Implementation Finance Conclusion<br>
slide12. First, focus on the health sector Focus Health Property & Casualty Banking Life & Savings Asset Management Urgency
Customer needs
High growth potential
Lock-in effect possibility Set a focus on one sector to get specialized and fulfill customer needs.
Take advantage of the “urgency factor” of health.
Use the lock-in effect and the up-selling possibilities. 12<br>
slide13. Focus on the B2C sector Business B2B B2C Changing customer needs
High growth potential
Mobile first
Range
Economies of scale Why? 13 Management Summary Analysis Implementation Finance Conclusion<br>
slide14. There is a shift in the value proposition due to changing customer needs Traditional Conservative
Built on trust and caution
Stability
Accuracy
Reliable claims payment
Policy renewals New needs INNOVATION
Choice
Flexibility
Simplicity
Personalization 14 Management Summary Analysis Implementation Finance Conclusion<br>
slide15. There is a shift in the value proposition due to changing customer needs Traditional Conservative
Built on trust and caution
Stability
Accuracy
Reliable claims payment
Policy renewals New needs INNOVATION
Choice
Flexibility
Simplicity
Personalization Focus on the changed customer needs like flexibility, personalization and simplicity.
Built up a unique selling point for customers. 15<br>
slide16. Alternatives Emerging market
Middle class is increasing
Demand for insurances and education about it
Lower competition than in Europe or North America
Easy entry to Chinese market due to joint venture with the government Why? 16 Management Summary Analysis Implementation Finance Conclusion<br>
slide17. Alternatives Emerging market
Middle class is increasing
Demand for insurances and education about it
Lower competition than in Europe or North America Take advantage of the emerging market in Asia.
Start in China 17<br>
slide18. AXA has several alternatives which need to be looked with regard to certain criteria 18 Management Summary Analysis Implementation Finance Conclusion<br>
slide19. Looking at alternatives gives a clear picture 19 Management Summary Analysis Implementation Finance Conclusion<br>
slide20. Looking at alternatives gives a clear picture 20 Management Summary Analysis Implementation Finance Conclusion<br>
slide21. AXA – on demand: the way to go 21 Management Summary Analysis Implementation Finance Conclusion<br>
slide22. AXA – on demand: the way to go Recommendation
Creating an on-demand B2C insurance service in the Asian market in order to fulfill the changing customer needs. 22<br>
slide23. Implementation Bastian 23<br>
slide24. Our strategic roadmap targets an on-demand insurance in Chinese health sector M&A of on-demand Insurtech Health sector network in China Going life on-demand service Further roll-out globally Identify cooperation partner Introduce Insurance service to partners’ customers Identify further growth potential Identify cooperation partner (FANG) Built up health sector network in China Going life on-demand service Further roll-out globally M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally 24 Management Summary Analysis Implementation Finance Conclusion<br>
slide25. What is on-demand insurance? On-demand insurance:
Customer can book insurance, whenever it is needed.
Booking completed within minutes through an mobile app or web.
Value proposition:
Customer can book insurance on-demand whenever he needs it
Stream-lined and fast booking process through app 25 Management Summary Analysis Implementation Finance Conclusion<br>
slide26. The target for on-demand insurance will be Slice M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally Measures
Identify on-demand service provided (Target: Slice)
Due diligence (financial, legal and commercial)
Signing & Closure Why M&A?
Time pressure (own development takes longer)
Difficult to find talents for own development 26 Management Summary Analysis Implementation Finance Conclusion<br>
slide27. Existing joint-venture in China can be used for setting-up health sector network M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally AXA Tianping joint-venture can be used as basis for expansion to China
Employees can be used for setting up cooperation with health sector network
Cooperation is likely because of good relationship to Chinese government
Employee base needs to be expanded and trained
On-demand insurance will be introduced to health sector 27 Management Summary Analysis Implementation Finance Conclusion<br>
slide28. On-demand insurance will lock in customers and deliver upsell potential M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally On-demand insurance will be introduced to B2C market via hospitals
Customers can book health insurance within minutes through app
Lock-in of customers through contract running two years
Up-selling potential of other insurances through application (property and casualty)
Nurturing of former customer base within app
Price discounts for longer contract run-time 28 Management Summary Analysis Implementation Finance Conclusion<br>
slide29. On-demand insurance can be scaled and rolled-out to other countries M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally On-demand service is highly scalable and can be rolled-out to other countries in Asia and worldwide
Target on emerging countries because rising middle class
Market entry can differ per market (e.g. hospitals in China) 29 Management Summary Analysis Implementation Finance Conclusion<br>
slide30. Timeline for introduction of on-demand insurance to Chinese market 30 Management Summary Analysis Implementation Finance Conclusion<br>
slide31. Finance Robin 31<br>
slide32. KPIs Go-live of insurance program in
2022 Revenue share from Asian market by 2025
16% Total investment required until 2025
20B$ Scaling potential of AXA Tianping to cover
15%
Of Chinese population by 2025 Break-even in
2025 Free cashflows from Asian market by 2025
132M$ Revenue from Asian market in 2025
17B$ Gross margin in 2025
5% 32 Management Summary Analysis Implementation Finance Conclusion<br>
slide33. Revenue structure 33 Management Summary Analysis Implementation Finance Conclusion<br>
slide34. Risks and Mitigations Networking with health sector fails
Customer do not adopt offers
Preferred M&A target not acquirable Urgency Importance Already excising Joint Venture with government
Urgency will at some point enforce actions
Strong excising cash reserves and own capabilities (Kamet) ? ! I II III 34 Management Summary Analysis Implementation Finance Conclusion<br>
slide35. Conclusion Carolin 35<br>
slide36. Question 1 Question:
How should AXA advance on its payer-to-partner journey? What should be the strategic roadmap and targets for AXA Next?
Answer:
Changed customer needs (e.g. choice, flexibility, simplicity) demand new products. Therefore, AXA needs to offer innovative insurance services to customer. In introducing on-demand insurance customer needs are fulfilled. 36 Management Summary Analysis Implementation Finance Conclusion<br>
slide37. Question 2 Question:
How could AXA speed up innovation to create new products/ services/ experiences that would differentiate it in increasingly fluid society and marketplace?
Answer:
Innovation process can be speeded up by acquiring Insurtech start-ups like Slice for on-demand insurance. 37 Management Summary Analysis Implementation Finance Conclusion<br>
slide38. Question 3 Question:
What could AXA do in order to have a greater impact on the Asian market?
Answer:
Introduce on-demand insurance in health sector in order to reach middle class in China (and Asia) and leverage the upsell potential of other insurance products. 38 Management Summary Analysis Implementation Finance Conclusion<br>
slide39. Question 4 Question:
In what ways must the company long-established processes and ways of working change to adapt to the new realities of the digital world?
Answer:
Employee base in Chinese JV has to be expanded and also trained to ensure sustainability. New products and distribution channels like on-demand insurance through a mobile app differ from current product portfolio. Therefore, change management is necessary. 39 Management Summary Analysis Implementation Finance Conclusion<br>
slide40. Monday Morning Actions Setting up
project team Develop
Algorithm 40 Management Summary Analysis Implementation Finance Conclusion<br>
slide41. Appendix 41<br>
slide42. Revenue structure 42<br>
slide43. Revenue structure 43<br>
slide44. Thank you for your attention! 44<br>
slide2. Agenda 2<br>
slide3. Management Summary Carolin 3<br>
slide4. Key Issues Management Summary Analysis Implementation Finance Conclusion Easy market entry for new customers
Behind in tech trends
High dependency in capital markets<br>
slide5. Key Issues Easy market entry for new customers
Behind in tech trends
High dependency in capital markets How can AXA keep being competitive and transform the health market? 5<br>
slide6. A business model shift is needed Strategy
Shift of core business model
Expansion of digital offer
Acquisition of new customers Outcome
Revolutionize health care system in the Asian market
Increase market share
Benefit reputation 6 Management Summary Analysis Implementation Finance Conclusion<br>
slide7. Analysis Theresa 7<br>
slide8. Axa faces a highly competitive market The trends in the industry is challenging the competitive landscape Wave of Mergers & Acquisitons Impact of technology (AI, IoT, Blockchain) The rise of insuretechs AXA does not only compete with insurance companies but also with banks, asset management companies, investment advisers and other financial institutions Global multi-line insurance majors Strong regional players Digital-first insurtech companies 8 Management Summary Analysis Implementation Finance Conclusion<br>
slide9. Axa forces a highly competitive market The trends in the industry is challenging the competitive landscape Wave of Mergers & Acquisitons Impact of technology (AI, IoT, Blockchain) The rise of insuretechs AXA does not only compete with insurance companies but also with banks, asset management companies, investment advisers and other financial institutions Global multi-line insurance majors Strong regional players Digital-first insurtech companies How can AXA create a unique selling point to outstand the competitors? What should AXA focus on? 9<br>
slide10. Looking ahead, AXA has several decisions to make 10 Management Summary Analysis Implementation Finance Conclusion<br>
slide11. First, focus on the health sector Focus Health Property & Casualty Banking Life & Savings Asset Management Urgency
Customer needs
High growth potential
Lock-in effect possibility Why? 11 Management Summary Analysis Implementation Finance Conclusion<br>
slide12. First, focus on the health sector Focus Health Property & Casualty Banking Life & Savings Asset Management Urgency
Customer needs
High growth potential
Lock-in effect possibility Set a focus on one sector to get specialized and fulfill customer needs.
Take advantage of the “urgency factor” of health.
Use the lock-in effect and the up-selling possibilities. 12<br>
slide13. Focus on the B2C sector Business B2B B2C Changing customer needs
High growth potential
Mobile first
Range
Economies of scale Why? 13 Management Summary Analysis Implementation Finance Conclusion<br>
slide14. There is a shift in the value proposition due to changing customer needs Traditional Conservative
Built on trust and caution
Stability
Accuracy
Reliable claims payment
Policy renewals New needs INNOVATION
Choice
Flexibility
Simplicity
Personalization 14 Management Summary Analysis Implementation Finance Conclusion<br>
slide15. There is a shift in the value proposition due to changing customer needs Traditional Conservative
Built on trust and caution
Stability
Accuracy
Reliable claims payment
Policy renewals New needs INNOVATION
Choice
Flexibility
Simplicity
Personalization Focus on the changed customer needs like flexibility, personalization and simplicity.
Built up a unique selling point for customers. 15<br>
slide16. Alternatives Emerging market
Middle class is increasing
Demand for insurances and education about it
Lower competition than in Europe or North America
Easy entry to Chinese market due to joint venture with the government Why? 16 Management Summary Analysis Implementation Finance Conclusion<br>
slide17. Alternatives Emerging market
Middle class is increasing
Demand for insurances and education about it
Lower competition than in Europe or North America Take advantage of the emerging market in Asia.
Start in China 17<br>
slide18. AXA has several alternatives which need to be looked with regard to certain criteria 18 Management Summary Analysis Implementation Finance Conclusion<br>
slide19. Looking at alternatives gives a clear picture 19 Management Summary Analysis Implementation Finance Conclusion<br>
slide20. Looking at alternatives gives a clear picture 20 Management Summary Analysis Implementation Finance Conclusion<br>
slide21. AXA – on demand: the way to go 21 Management Summary Analysis Implementation Finance Conclusion<br>
slide22. AXA – on demand: the way to go Recommendation
Creating an on-demand B2C insurance service in the Asian market in order to fulfill the changing customer needs. 22<br>
slide23. Implementation Bastian 23<br>
slide24. Our strategic roadmap targets an on-demand insurance in Chinese health sector M&A of on-demand Insurtech Health sector network in China Going life on-demand service Further roll-out globally Identify cooperation partner Introduce Insurance service to partners’ customers Identify further growth potential Identify cooperation partner (FANG) Built up health sector network in China Going life on-demand service Further roll-out globally M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally 24 Management Summary Analysis Implementation Finance Conclusion<br>
slide25. What is on-demand insurance? On-demand insurance:
Customer can book insurance, whenever it is needed.
Booking completed within minutes through an mobile app or web.
Value proposition:
Customer can book insurance on-demand whenever he needs it
Stream-lined and fast booking process through app 25 Management Summary Analysis Implementation Finance Conclusion<br>
slide26. The target for on-demand insurance will be Slice M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally Measures
Identify on-demand service provided (Target: Slice)
Due diligence (financial, legal and commercial)
Signing & Closure Why M&A?
Time pressure (own development takes longer)
Difficult to find talents for own development 26 Management Summary Analysis Implementation Finance Conclusion<br>
slide27. Existing joint-venture in China can be used for setting-up health sector network M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally AXA Tianping joint-venture can be used as basis for expansion to China
Employees can be used for setting up cooperation with health sector network
Cooperation is likely because of good relationship to Chinese government
Employee base needs to be expanded and trained
On-demand insurance will be introduced to health sector 27 Management Summary Analysis Implementation Finance Conclusion<br>
slide28. On-demand insurance will lock in customers and deliver upsell potential M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally On-demand insurance will be introduced to B2C market via hospitals
Customers can book health insurance within minutes through app
Lock-in of customers through contract running two years
Up-selling potential of other insurances through application (property and casualty)
Nurturing of former customer base within app
Price discounts for longer contract run-time 28 Management Summary Analysis Implementation Finance Conclusion<br>
slide29. On-demand insurance can be scaled and rolled-out to other countries M&A of on-demand Insurtech Built up health sector network in China Going life on-demand service Further roll-out globally On-demand service is highly scalable and can be rolled-out to other countries in Asia and worldwide
Target on emerging countries because rising middle class
Market entry can differ per market (e.g. hospitals in China) 29 Management Summary Analysis Implementation Finance Conclusion<br>
slide30. Timeline for introduction of on-demand insurance to Chinese market 30 Management Summary Analysis Implementation Finance Conclusion<br>
slide31. Finance Robin 31<br>
slide32. KPIs Go-live of insurance program in
2022 Revenue share from Asian market by 2025
16% Total investment required until 2025
20B$ Scaling potential of AXA Tianping to cover
15%
Of Chinese population by 2025 Break-even in
2025 Free cashflows from Asian market by 2025
132M$ Revenue from Asian market in 2025
17B$ Gross margin in 2025
5% 32 Management Summary Analysis Implementation Finance Conclusion<br>
slide33. Revenue structure 33 Management Summary Analysis Implementation Finance Conclusion<br>
slide34. Risks and Mitigations Networking with health sector fails
Customer do not adopt offers
Preferred M&A target not acquirable Urgency Importance Already excising Joint Venture with government
Urgency will at some point enforce actions
Strong excising cash reserves and own capabilities (Kamet) ? ! I II III 34 Management Summary Analysis Implementation Finance Conclusion<br>
slide35. Conclusion Carolin 35<br>
slide36. Question 1 Question:
How should AXA advance on its payer-to-partner journey? What should be the strategic roadmap and targets for AXA Next?
Answer:
Changed customer needs (e.g. choice, flexibility, simplicity) demand new products. Therefore, AXA needs to offer innovative insurance services to customer. In introducing on-demand insurance customer needs are fulfilled. 36 Management Summary Analysis Implementation Finance Conclusion<br>
slide37. Question 2 Question:
How could AXA speed up innovation to create new products/ services/ experiences that would differentiate it in increasingly fluid society and marketplace?
Answer:
Innovation process can be speeded up by acquiring Insurtech start-ups like Slice for on-demand insurance. 37 Management Summary Analysis Implementation Finance Conclusion<br>
slide38. Question 3 Question:
What could AXA do in order to have a greater impact on the Asian market?
Answer:
Introduce on-demand insurance in health sector in order to reach middle class in China (and Asia) and leverage the upsell potential of other insurance products. 38 Management Summary Analysis Implementation Finance Conclusion<br>
slide39. Question 4 Question:
In what ways must the company long-established processes and ways of working change to adapt to the new realities of the digital world?
Answer:
Employee base in Chinese JV has to be expanded and also trained to ensure sustainability. New products and distribution channels like on-demand insurance through a mobile app differ from current product portfolio. Therefore, change management is necessary. 39 Management Summary Analysis Implementation Finance Conclusion<br>
slide40. Monday Morning Actions Setting up
project team Develop
Algorithm 40 Management Summary Analysis Implementation Finance Conclusion<br>
slide41. Appendix 41<br>
slide42. Revenue structure 42<br>
slide43. Revenue structure 43<br>
slide44. Thank you for your attention! 44<br>