The way multinational companies look at developing a presence in particular markets can differ. At AXA, the second-largest European insurer in terms of revenue, it opts to partner with local banks in Southeast Asia to ensure success in a region it deems full of untapped potential.
Hassan El-Shabrawishi, chief executive of AXA International Markets.
In Thailand, AXA's biggest market in Southeast Asia, the French insurer has partnered with state-owned Krungthai Bank for 28 years.
In Indonesia, the second-largest market in the region, AXA established a joint venture with the prominent Bank Mandiri 21 years ago.
In the Philippines, the business is growing via a strong partnership with Metrobank, the second-largest private universal bank in the country.
"In Southeast Asia, we have strong partnerships in each of these countries that allow us to understand the local needs, tailor options and follow banks' segmentation so we can meet the demands of those customers," said Hassan El-Shabrawishi, chief executive of AXA International Markets.
A local bank understands customers' needs as well as corporate needs because many of these banks are the main lenders for the market, helping to drive the economy, he said.
"We try to help these banks to satisfy the needs of their corporate and retail customers alike," Mr El-Shabrawishi said during a recent visit to Bangkok.
Named chief executive of AXA International Markets in June 2023, he is in charge of 17 markets spanning Latin America, Africa, the Middle East, Turkey, Southeast Asia and South Korea. AXA operates in 51 countries.
GLOBAL AND LOCAL EXPERTISE
In Thailand, AXA operates two companies: Krungthai-AXA Life Insurance (KTAXA) and AXA Thailand General Insurance. Both firms report to Sally O'Hara, AXA's chief executive for Southeast Asia and South Korea.
"Local banks are more than just partners -- they are joint venture partners. Our company is owned by them in each of the markets where we operate," said Mr El-Shabrawishi.
To support the local partners, AXA provides insurance knowledge and international expertise, including risk management, he said.
"They know their market, but they don't have insurance expertise. We provide them with the global knowledge based on our operations in more than 50 markets, including risk management for insurance so they can build successful subsidiaries to their banking activities and satisfy customer demand," said Mr El-Shabrawishi.
Mrs O'Hara said for life insurance, KTAXA recorded double-digit growth in new business last year as the market grew.
General insurance has grown by double digits for six consecutive years.
"Post-pandemic, people have an increased awareness of their needs around health insurance. We have new groups of people buying insurance because they see the need for it, which is driving substantial growth," she said.
"Our distribution force numbers around 15,000. Our AXA Prime agents have been trained to be qualified for all of our product lines, and we guide them through their career progression. Given that quality, they reach more customers and retain more."
Mr El-Shabrawishi highlighted AXA's strategy of understanding customers' evolving needs in order to offer products they want.
"One of the biggest mistakes some international players make is trying to push one-size-fits-all products in different countries, thinking a Thai family has the same needs as a French family or a British family," he said.
"AXA has different products and we're flexible to accommodate varied demand. We have an innovative mindset tailored to our international market."
Health insurance, for example, has strong demand in Thailand and AXA offers products for all price points, not only wealthy customers, said Mrs O'Hara.
"We have a unique unit called AXA EssentiALL tasked with providing services and products for the underserved," she said.
"We have a large portfolio of mass-market products that are accessible and affordable, catering to the unique needs of these individuals."
Mr El-Shabrawishi said this outlook underpins the local way AXA looks at its business, yet driven by global expertise.
UNTAPPED POTENTIAL
He said Southeast Asia is a growth generator for the AXA group, given the low insurance penetration rate and growing middle class.
In this region, insurance penetration is around 5%, compared with much higher rates in developed countries. In France, the penetration rate is 14%.
"The region has plenty of room to grow and the opportunity to outperform more mature markets. It's an exciting part of our business," said Mr El-Shabrawishi.
"We are in very selective markets and customer needs are growing for protection everywhere where we operate."
Thailand's insurance potential is also driven by an ageing population that requires growing protection.
"By 2030, about a quarter of Thai society will be age 60 or older," he said.
"We are looking at how can we serve our customers pre-retirement, during retirement and even post-retirement, because these are new needs."
In Indonesia, there are many young families with new needs.
"There is an emerging middle class that requires new financial and health protection for their families and their assets," said Mr El-Shabrawishi.
He played down Thailand's slow economic growth.
"What matters is the penetration rates and unfulfilled needs of customers in this market. Regardless of the economy, there is still huge untapped potential here, which is a growth engine for what we can deliver," said Mr El-Shabrawishi.
"We are a long-term player in terms of our view of the economy. Thailand can return to a pre-pandemic economy quickly, and we can accompany you on this journey."
Thailand is undergoing a digital transformation, with travel, health, personal accident and property insurance being offered through digital channels, he said.
"We will continue to ensure we have digital products in line with this shift," said Mrs O'Hara.
"But insurance is also a people business, so we will expand the capacity of our face-to-face channels."
