Organizational Restructuring at AXA: Adopting (and Dropping) a New Business Model


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Case Details:

Case Code : BSTR079
Case Length : 18 Pages
Period : 1996-2006
Organization : AXA Organizational Restructuring
Pub Date : 2003
Teaching Note :Not Available
Countries : France
Industry : ---

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EXCERPTS Contd...

Reorganizing AXA - Phase II

Industry observers claimed that with the above changes, Axa, till now a 'provider of insurance and reinsurance solutions,' had made its first move towards becoming an outfit offering a 'comprehensive range of financial, risk management and asset/wealth management solutions.'

The company was planning to make some more radical changes in its traditional structure. Axa knew that like Axa Re, AGR and Axa Cessions, there were, in all probability, many more affiliate companies fighting it out among themselves for the same clients in different parts of the world. In the new set up, there was no question of a prospect being looked at as a client by more than one unit of the company. A client of a single unit became the client of the entire group. Axa's top management formulated a new rule, according to which, no other group company could solicit a client that Axa Corporate Solutions dealt with or planned to deal with. Axa Corporate Solutions prepared a list of such prospects/clients, which was circulated among all the group companies...

The Transition and the Problems that Followed

Axa sources revealed that to achieve the synergies expected out of combining Axa Re, AGR and Axa Cessions, the 'best practices' of all of them would be adopted. Since Axa Re had more exposure to the global way of running a business, its managers were given most of the top spots in Axa Corporate Solutions.

While Nessi was the CEO of the new outfit, AGR's erstwhile head, Charles-François Walckenaer, was made a member of the management team. After spending one year fine-tuning the group's corporate structure and defining the roles and responsibilities of the newly-created entities, Axa finally introduced Axa Corporate Solutions to the world at the '2000 Les Rendez-Vous de Septembre.' Axa announced that the company would be headquartered in Paris with regional offices across the world. By January 2001, all the legal formalities (within France and the other countries) were completed and Axa Corporate Solutions became operational. However, from the very start, the prospects of Axa Corporate Solutions were viewed with concern by industry observers...

Reorganizing AXA - Phase III

At the '2002 Les Rendez-Vous de Septembre,' Axa announced that Axa Corporate Solutions would be split into three parts again. Axa Re was resurrected as the group's reinsurance division, and the industrial risks business (once AGR) was renamed Axa Corporate Solutions Assurance. The third unit, Axa Liabilities Managers, was to take care of the run-off businesses. Axa also announced that it would stop dealing in financial guarantees in the US and would limit the reinsurance operations in that country...

Exhibits

Exhibit I: Top 10 Life/Health Insurance Companies (2002)
Exhibit II: AXA - Financial Performance Summary (1999-2002)
Exhibit III: Top 15 Reinsurance Groups (2002)
Exhibit IV: AXA - Detailed Organizational Structure Chart

 

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