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 some five years ago. In this interview with Patrick Atuanya, editor BusinessDay; Modestus Anaesoronye, and Michael Ani, he shares his thoughts on the vision of the group, African market expansion, and interest in the Nigerian market. Excerpts:
How can you describe your first time in Nigeria Like?
Yes, you can say it is my first time in Nigeria, but it is definitely not my first time in Africa as I have worked several years in West Africa and Central Africa but mostly in the French African countries. I have never had the opportunity of coming to Nigeria, but the first time coming here for me has been interesting.
Being in charge of international market has given me much exposure to all the biggest megacities in the world and so far, I will say Lagos is the easiest city I have been to as it took us only 40 minutes to get in here from the airport, making me think businesses were on strike due to my expectation of bigger traffic jam. However, my trip down here has so far been interesting.
You just transitioned from being the chief transmission officer to being the CEO of the International and Emerging Markets. How can you best describe this transition process?
Indeed, I was in charge of the transformation of Axa before, mostly through the use of technology and data and changing the way we serve our clients. When we were transmitting the group 18 months ago, we made very bold rules to give the power to the local entities. It was our conviction that the closer you are to the clients, the better you make the right decision. In the same token, when I was in charge of the transformation process, we saw the way the world was changing especially on the technology side. We had this strong conviction that the emerging markets have the ability to leapfrog on many of the existing technologies that we have in the developed markets and if we know how to leverage them, we would go much faster and much further. For me, I will say that I am trying to bring in the knowledge and the expertise that I have in my job as a transformation, seeing the key strategic decisions that we have to make, combine it with using global best practices, including first for growth, first for innovation, first for being known in emerging markets. I have the idea that if we combine these strategies well, we will have a bright future in those markets, including Nigeria.
Having been in nine countries under your group, how does Axa navigate the cultures in these markets to sell its product and still grow its footprint without stumbling?
First of all, I must say that we are not starting from scratch. In Axa, there is a conviction that to be relevant in the 20th and the 21st centuries, you have to be a global peer. We were a very small regional French company more than 20 years ago but now we have become one of the global leaders because our founder and predecessor had a strong conviction that we have to go global.
Secondly, we may be successful in being a global leader, but the truth is that we have made several mistakes in the past. The way we have adopted to manage these local markets was that we made a conscious choice that we needed people who have experience in these markets because it is one thing to be bright but it is another thing to know and understand the feelings of the local markets. Two things, a leadership teammate of people who have worked in emerging markets, while the other, as much as we can, we favour local CEOs.
Last year, we appointed an Egyptian to lead our Egypt market; we appointed a Turkish to lead our Turkey business because we know that the quality of the leader that makes the decision because we know for a fact that a person that knows the market, that understands the terrain and that speaks the language is much better than others. The Third point is on how we can make sure that every day, the local way of doing things has the same with our global process because we are very keen on knowing what the Nigerian specifics are so that we can sign them in with the global practices that we have in Axa.
What are your thoughts on your investments in the Nigerian business? 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 product 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.
We believe also that if we are able to focus on these two things, we stand a chance of benefiting from the opportunities that we see in the market. You recall that about nine years ago, we started a public enlightenment campaign in Nigeria with a few players in the market. There is also an on-going campaign that involves the whole market including NAICOM as it is clear that everyone recognises the fact that there is need for public enlightenment.
You mentioned your company bringing some innovations into the local markets. Can you talk about some of these innovations?
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, our team in Nigeria, we took their ideas 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 just before this interview 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 a 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 a modern fully digitised and fully automated services.
With this we give away all the hassle 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.
Constantly we try to cross-fertilise all these things and that is the interest of being part of the global players because it gives opportunity for the Nigerian team to have access for all this package and I must say have a taste of what it looks like today. What Nigeria is doing is part of what we share abroad to say, look at what they do and the efficiency on how they do it and the cost-effectiveness in how they do it, and it will be used by others around the globe.
How do you tackle some of the challenges you encounter in the Nigerian market?
I think the Nigerian market is not different from the challenges that we will face tomorrow in Indonesia, Egypt, Mexico, 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 much as we see in the past. So the challenges are somewhat the same; however they could be specific as we have got upcoming elections in the country. In every country in the world, when elections are coming, the level of uncertainties rises and most people post fear but this is where our expertise as a global player comes in as we will look beyond the elections because we believe in the future of Nigeria and we keep it straight and carry on.
Are you not worried about competitions?
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 market 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 trying to get new customers on board?
Firstly, insurance, almost nowhere 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 5 or 6 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 regulators recently suspended tier-based capitalisation which a lot of people thought is the way to go for the industry and we heard that a lot of the bigger insurance firms are beginning to respond to the regulation. 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 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 that 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 two days ago 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 Knowledge 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 anticipates 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.
