Controls Ata Axa

Governance and Control At France AXA

BY CHAITANYA PRERNA PRASAD RAJESH SIVA VINITH SNEH

Introduction • France Based Group specializing in Insurance and Investment Management Solutions • Operations in Five Business Segments: Life and Savings, Property and causality, International Insurance, Asset Management and other Financial Services • AXA has a Dual Corporate Governance Structure- Activities being Controlled by Supervisory Board and

Global Ventures • Parent Company of AXA GroupMCI Founded in 1816 • Till Early 90’s expanded organically and inorganically within France. • 1st Overseas Venture in Canada in 1955. • While Going Global, AXA global Market Share: France- 60%, Rest Europe- 30.2 %, Canada- 0.5% and

Good Control-1CENTRALIZATION AT AXA Previous structure

New structure

LoB/ local organization #3

LoB/ local organization #3

LoB/ local organization #4

PO

N U

B

LoB/ local organization #2

M M O

LoB/ local organization #4

C LE TE

LoB/ local organization #2

IC

BPO

LoB/ local organization #n

CLAIMS

TELECOMMMUNICATIONS

APPLICATION SOLUTIONS

S LA IM

LoB/ local organization #1

C

LoB/ local organization #5

S N IO AT

LoB/ local organization #1

n io at s i c ce pl rvi Ap se

Corporate organization

Corporate organization

LoB/ local organization #n

LoB/ local organization #5

Good Control-2 DECENTRALIZED RISK MANAGEMENT CENTRAL RISK MANAGEMENT DEPARTMENT

MANA GEME NT BOARD

SUPER VISOR Y BOARD

AUDIT COMM ITTEE

CF O LOCAL OFFICE #1

LOCAL OFFICE #2

Local risk management department

LOCAL OFFICE #N

Risk Management Internal process A global & loc al go vern an ce ba sed on b us ine ss-o rien ted

rt tice o th pp rac i w su t p k y or sel bes W lo re Ÿ C ha ŸS

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Ÿ Actuarial Ÿ Asset Management Ÿ Product design Ÿ…

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Local Business Departments

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Group Risk Management Team

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Help to find compliant solutions /Control /Approve

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Local Risk Management Team

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Good Control-3 DECENTRALIZATION AT AXA NEW CAPITAL PRODUCTS

HQ KPI

BRAND

SUPERVISORY BOARD MANAGEMENT BOARD

PRODUCT STRTEGIES

MARKET DEVELOPMEN T

LOCAL OFFICE

RM PRACTICES

DISTRIBUTIO N

Bad Control- I • Partial Governance of Business & Distribution at Centralized and Decentralized Level • Functions like Retail Business, Health Business, Commercial Business and Distribution & Marketing were controlled at Centralized level • Localized decisions were also implementation

Solution to bad control-1 Due to Sales and Marketing , and regulatory Issues, Business and Distribution functions must be practiced at subsidiary levels

Bad Control-II All the KPI’s cannot be centralized. The same key performance indicators cannot be applicable to different subsidiaries present around the world. Different customers would have different requirements in terms of insurance policies. For example property and casualty insurance segment is not well regulated in India where as it is highly

Solution to Control-II Certain extent of decentralization provided to KPI’s according to the local market insurance requirements of regional markets. Adequate amount of authority should be provided to subsidiaries in deciding the organization wide KPI’s.

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