AXA Canada improves profit, continues national growthBy Marie-Josée Boucher | March 20 2004 02:22PM
Last year was AXA Canada’s best year since it began operations in this country. This dynamic upsurge – mainly the result of improved auto results – ended years of shrinking profits.
According to numbers published by reinsurer SCOR, AXA posted a $61.7 million profit last year, an increase of 180% from 2002. A return to positive technical results (combined ratio of 98.8%) and lifted investment gains explain the surge in profits.
“Profitability is good for all of our products except our auto insurance activities outside Quebec,” revealed Jean-François Blais, the 37-year old actuary who will become the new president and CEO of AXA Canada on April 3. “Yet even in that case we have seen encouraging signs for the past six months. We think the worst is over,” added Mr. Blais in an exclusive interview with The Insurance Journal in early February.
Mr. Blais replaces Jean-Denis Talon, who is stepping back from daily management of the insurance company. Mr. Talon will serve as chairman of the board.
Mr. Blais said he prefers to avoid acquisitions as a means of obtaining market share from his competitors. “Acquisitions are risky. Our priority should be internal business growth. In fact, globally, organic growth of business of five per cent represents the equivalent of a large acquisition for AXA simply because of the size of the Group.”
He confirmed that AXA is not aiming for a particular ranking among the largest insurers in Canada. The company is striving for profitable growth regardless of its status in the sector. He intends to give the managers of the company’s business units leeway to define the best ways to achieve growth.
In AXA’s 2002 annual report, Mr. Blais, then executive vice-president operations, describes the past fiscal year as a year of “transition.” What happened next? “We can describe the past year as a year when our efforts materialized, filled with many initiatives and again much transition. In 2004, we want to increase our sales by five to ten per cent, depending on the sector, and to improve our products-services offering, train our people better and help distributors be more efficient,” he said with conviction.
P&C and life insurance
In property and casualty (P&C) insurance, AXA controlled a market share of four per cent in Canada last year.
“Our life insurance activities are just beginning. However, we are posting strong growth, which should amount to nearly $100 million in sales in 2004.”
AXA is currently doubling its efforts to penetrate the life insurance market outside Quebec. “Right now we are concentrating on repositioning our company in the market. AXA is intent on quickly seeking out a national presence in life insurance, by adapting to the operating methods of each province.”
Cross-selling of products is one way to successfully expand, The Insurance Journal revealed in January. For example, the Gemini project, designed to transform P&C firms into one-stop providers of financial products, is being implemented outside Quebec.
But is selling life insurance products to P&C customers up to the brokerage network or the insurer? “Brokers are not asking for that type of integration of customers. But do we push as an insurer? I’m not ready to say yes,” he said.