Benoit Claveranne, CEO, International and New Markets at AXA, was in Nigeria for the first time to have a feel of its local subsidiary, AXA Mansard Plc, which the group acquired five years ago. He shares his thoughts on the vision of the group, African market expansion, and interest in the Nigerian market. Excerpts:
What are your thoughts on your investments in Nigeria? How are they performing?
First of all, the decision was made five years ago that if you want to be a relevant player in the African market, you need to have a presence in Nigeria. Nigeria is a country on the map that if you want to do well globally, you have to be in. Secondly, we are very happy with the investment that we did in Axa Mansard as it has so far brought in very good numbers, innovations and a very high level of customer services. We know that we are not the only one that believes in Nigeria but we believe that we have a very good asset on which we can build to go further.
We believe in the fundamentals of the Nigerian market because it is a long-term business and not a short-term business and when you look at the fundamentals of the Nigerian economy, like a large population, strong GDP, strong growth in the middle class that requires more and more protection. Hence, if you want to be relevant in Africa, you need to have a presence in the largest country of the continent and that is why the company is collaborating with other stakeholders in the insurance market to improve insurance adoption or uptake of insurance products through public enlightenment as it is important that we enlighten the public. We believe it is the first market in Africa, and we are making sure we invest in the development of local technical capacity.
You indicated that your company brought some innovations into the local market. Can you elaborate on this?
It’s a two-way thing. On one hand, we are exposed to the global environment because we are in 62 markets. We are constantly exposed to innovations of the competition, new needs of clients and new technology that we have to constantly unveil. For instance, we took the ideas of our team in Nigeria last year and discussed it. We went to Indonesia, discussed with our teams there because we know that the changes you have in Indonesia might not be the same as what you have in the Nigerian market. We had a session on health and came up with a very distinctive value proposal for our Nigerian clients. If you want to have an extremely customer-centric offer, we have utilisation ratio of more than 80 percent. Hence, I can say that the value for money for the Nigerian client is very high and we offer that with modern, fully digitised and fully automated services. With this, we give away all the hassles of the usual infant processes to the client in the country or for him or her with value-added services with medical opinion and we could have similar examples of what we do in Egypt, Mexico, France.
How did you tackle some of the challenges you encountered in the Nigerian market?
I think the Nigerian market is not different from the challenges that we will face tomorrow in Indonesia, Egypt, Mexico or Brazil because they are all emerging economies, which over the long-term is going to grow but is going to have volatility around that trend that is higher than what you will have in a mature economy. The challenge for us is on how to navigate through such volatility. Sometimes it is macro-economic volatility, sometimes it is political volatility, financial volatility, however, it is our responsibility to steer with a view of the mid-term to long-term horizon, help and support the team to capture all the opportunities. One risk you might have in that kind of situation is if you don’t master volatility, if you don’t go for the volatility and not to allow it disturb your plans hence, you must face a risk that is sure.
Another challenge is sometimes having too many battles to fight without being strict enough in picking the right one because there is so much potential money going in the streets that you might want to do it in their own way. And if you decide to do it in their own way, you might not do it well. Another major challenge is on the need for people who have experience in the market, but it is not as much as we saw in the past. So the challenges are somewhat the same; however, they could be specific.
Are you not worried about competition?
In Axa, we love competition. We believe in the free market economy and competition. We like the challenge as there are some markets that we are leaders and some markets that we have challenges and we love to challenge the leaders. We are very happy that some market players are now seeing the prospect that we saw five years ago as being the potential of Nigeria as so many persons questioned what we were doing but now, they are coming. We are very happy they are joining us; we know it will be good for them in the Nigerian economy and again, our proposition on a daily basis is to grow the cake for the benefit of the Nigerian people, hence, we are very happy that other people now see the benefit that we saw several years ago.
How do you intend to sustain the growth in this market by trying to get new customers on board?
Firstly, insurance, almost anywhere in the world comes as a natural instinct by people. The normal human hardly wakes up in the morning thinking of insurance but they can think of buying phones, clothes, etc. Also, in every of the markets we know about either in those markets where insurance penetration rate is high, or the rate is low, what is important to note is that it takes time to educate people; it takes time to understand what the risk is and how they can manage such risk. There are so many cultural aspects to it. In some countries, people don’t necessarily buy the concept of protecting their staff against hazard as they feel they don’t need an insurance company. Secondly, we have also seen many countries in which people get the concept but don’t really want to pay cash but they want the service. So, all these put together, you cannot do it alone. At some point, it has to be an industry commitment and I will say a government or public authority commitment. It takes a whole society to share the conviction that the safer the people are, the more they will invest, the more they will take care of the success of their children, and the more they will prepare for their own retirement.
Hence, our strategy is that we will sustain those big corporations that take care of their employees and offer those kinds of product solutions. The next challenge will be for the population who are not prepared for that: individual person, SMEs who will believe that the need for these services is high; however, when you have your own firm and have one or two employees, you don’t believe it is necessary to save some monthly to take care of your company and your employee. That is why there is a need for the regulators and every other player to come in and convince people and this should cover all forms of insurance.
There are really two ways why you have high insurance penetration. In most advanced countries, you have about 150 mandatory insurance; in Nigeria, you can count about five or six with others not enforced by law. For somebody working in a company site, it should not be by choice that they are protected; it should be by law that they should be protected against an accident when they are at a construction site. So, for a higher penetration of insurance, it cannot be achieved by employers doing it their own way, but by enforcing the law on protecting people against the risk that they cannot manage.
The second part is that we are in a market that we are trying to define the product in a way that really meets the people’s needs so that it won’t be something that they are forced to do, but because they really need it. If you ask any Nigerian today if they care about their health, they will tell you yes. But truly, do they really have a lot of solutions to their health? This is because provision and infrastructure need a lot of development. So the major task for us is on how we unlock the potentials that we see in the market and for us, it is by creating the right products- products that stand the chance in ensuring that the problems of an average man are solved and it is only when we do that coupled with other legally enforced insurance products that we can confidently unlock the potentials in the market.
The regulator recently suspended the tier-based capitalisation which a lot of people thought is the way to go for the industry. What are your views as regards the tier-based recapitalisation and how are you responding to it?
I think the regulators are going in the right direction. I think it is very clear that companies need to have the right capital to underwrite the right kind of businesses. For example, if you are underwriting an energy business, you need to have sufficient capital. You need to have sufficient capital in case there is a huge loss so you will be able to take care of it, so definitely, it is a step in the right direction.
I think some of the concerns that the insurance industry had as at the time the regulation came up with it was the fact that there wasn’t enough time to raise enough capital and meet up with the requirement and it seems as if it wasn’t cut out with enough time before it was suspended, but it was a wake-up call. For us, we have enough capital. It was just for us to meet up with the intermediate deadline that the regulator has set up. So, for us, it is more to consolidate on the position that we reached at the end of August and to ensure that we consistently have more capital even much more than what is required.
Tell us more about your target customer campaign, Know you can.
Indeed, we announced a new tag line for our brand and it is a direct conviction of the strategy that we have pushed for the last couple of years. We really believe that insurance is one of the tools to unleash the desire of people to create the kind of business that they want and take care of their kids to live a better life, which has led us to think differently on what we can do for our clients. And that is why we want to partner with them and to permanently find needs that are not covered today or new ways of giving them services around that. In AXA, we are convinced that we have the capacity to make people believe in themselves. We believe that if we strengthen their self-belief, we will make them have a better life and that is where the need for the motto: Know you can, comes in which means that AXA is here to help you strengthen your belief to have a better life. The Know you can tag line is a tag line that every member of our staff is willing to bring to life and we have three sets of principles that are put together in order to facilitate this and they are personal, proactive and progressive.
Personal: We need to know our customers a lot better because it is only when you know a customer very well that you can seek to partner and intervene in their life.
Proactive: To pre-empt and anticipate the customer’s need because if you can’t do this, then you will be reactive which might not be too good.
Progressive: To ensure that we are with the customers all through their journey as they progress in life.