Governance and Control at AXA
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Case Details:
Case Code : BSTR224
Case Length : 18 Pages
Period : 1991-2006
Organization : AXA
Pub Date : 2006
Teaching Note :Not Available
Countries : France
Themes: Corporate Governance | Control
Industry : Banking &
Financial Services
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Background Note
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The parent company of AXA, Mutuelle Contre de l'Assurance Contre l'Incendie
(MCI) was founded in 1816 by Jacques-Théodore le Carpentier and 17 other
entrepreneurs. The company was located at Rouen5
and was established as a fire insurance company. For a period of five years,
every shareholder in the company was both insurer and the insured party. This
was the beginning of a mutual company, where the insured parties owned the
company.
With growing competition from companies like La Providence (founded in 1838) and
La Paternelle (founded in 1843), MCI decided to diversify and develop its
activities.
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For this purpose, it created two companies - Mutualité Immobiliére and Mutualité
Mobiliére, and they started operating in 1847. In the 1850s, the companies
expanded their activities across France and started covering real estate risks.
In 1881, both the companies merged under the name Ancienne Mutuelle (AM).
In 1922, AM began offering automobile insurance under the name of AM Accidents.
In 1944, during the Second World War, US forces bombed the company's offices.
Though the accident and life insurance divisions were not severely damaged in
the bombing , tighter controls became necessary.
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This led to
the constitution of Groupe AM in 1946 under the leadership of André
Sahut d'Izarn. The company's first merger, the one with AM du Calvados,
took place in 1946. The other acquisitions made during the next decade
were Mutuelle d'Orléans, Mutualité Gérale life insurance company and La
Participation.
In 1955, AM ventured overseas by starting its operations in Quebec,
Canada. In 1958, Claude Bébéar (Bébéar) joined the group as a senior
manager. Bébéar was sent to Canada on an assignment and he developed the
Canadian subsidiary of AM named Provinces Unies. The early 1970s were turbulent for AM after the death of André Sahut d'Izarn
in 1972. |
To make matters worse, activities at AM were paralyzed for over two months in 1974 owing to a strike in the company. The strike ended with the appointment of Bébéar as Chairman. Bébéar brought in several changes
beginning with the change in the company's name. AM was renamed Mutuelles Unies (MU) in 1978. In the same year, MU acquired a company, Compagnie Parisienne de Garantie, located in France.
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