Claude Brunet Transversal Operations, Communication and Human Resources

1. Claude Brunet Transversal Operations, Communication and Human Resources

2. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples

3. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples

4. Strategic context Strive For Operational Excellence To Get On The Podium Locally Primarily In Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Productivity Leveraging Group Resources and Human Capital Drive Revenue Growth, Margins and Productivity Superior Value Creation For All Stakeholders

5. The context, productivity • Over the last 30 years, the gap between productivity gains in the manufacturing and financial services industries has widened considerably • Financial Services has significant potential for productivity gains

6. The context, quality of service • AXA’s customer satisfaction index is 53 • Another service quality indicator is the number of defaults • The quality of service is satisfactory but there is still room for improvement

7. Operational excellence at the heart of our strategy • Operational excellence has a direct impact on our five priority areas Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Productivity • And contributes to the implementation of our “Low Cost & High Value for clients” operating model

8. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples

9. AXA WayThe way to operational excellence • Why this approach? • Fact-based method • Analysis of the processes of the enterprise • Measurement of performance • Customer-oriented • The Voice of Customers • Employee ownership and responsibility • Each employee contribute to the improvement of the processes he works for • Continuous improvement of the performance • Customer and Performance culture

10. An industrialised approach to process control

11. Example N°1, Distribution: motor underwriting and IT assistance for agents (Italy) • The Problem: • Agents complained that motor underwriting & IT assistance was only available 40% of the time • The Customer Expectation: • High level of availability of IT assistance • The Solution: • Implement a web-based tool for issuing requests; • Requests can now be monitored and prioritized. • The Benefits: • Quality Improvement: Availability is increased to 99% • Productivity improvement: no added resources assigned to the process. • Project impact: €150 k over 12 months

12. Example N°2, Quality of Service: re-assignment of “orphan” customers (US) • The Problem: • Increase in the attrition when an associate terminates with AXA due to a lower quality if service • Total assets at risk $3.4 billion • The Customer Expectation: • Re-assignment in less than 7 days • The Solution: • Transform administrative process to a more functional, easy-to-use decision tool • Allow Branch Managers easier access to customer lists ranked by value to AXA by each field associate • Provide Branch Managers with MIS/tracking tool • The Benefits: • Lower time to re-assign customers : over 70% • Improve attrition by 22% • Project impact: $560 k over 12 months

13. Example N°3, Quality of Service: car policy renewal (Germany) • The Problem: • Low conversion rate on quotation requested by customer at its insurance policy renewal • The Customer Expectation: • Quotation at home within 3 days • The Solution: • Redesign the required quotation process • The Benefits: Projet AXA Way 2003 2002 Quotations sent Quotations sent within 3 days Conversion rate 210 722 36 % 16% 236 792 100 % 27 % (+ 12 %) (+ 178 %) (+ 69 %)

14. AXA WayAn approach focused on our business

15. AXA WayProcess improvement

16. AXA WayWhere are we today? • Current status (end of February) • Approach launched in 18 companies (83% of Group revenues) • 413 projects launched and 159 closed to date • 234 Black Belts trained and operational • 4000+ persons sensitized to AXA Way • Proven added value and potential for those who have put it into practice • Understood and accepted by key stakeholders

17. AXA WayWhere do we go? Phase 2 Competence and confidence Process Management rollout across the operations Phase 1 Awareness and launch Process Improvement prove the added value with initial successes Phase 3 Comfort and control Process Design Continuous improvement Rollout and Involve employees 2002 2006 Mid 2004

18. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples

19. Local versus Global: which model for Financial Protection? Convergence with added value • Reduce costs • Faster implementation • Reduce risks • … Local implementation Transversal optimisation • Statutory & legal constraints • Distribution models • Market maturity • Scale effect • Expertises • Richness of experiences Find the right balance according to the domain

20. The AXA model : everything is decentralized but… Group is monitoring We are sharing Capital Allocation Top Executives Management Brand Management Values Definition of AXA Standards (KPIs) Specialized Units Asset management IT Service/Solution Delivery Reinsurance Corporate Insurance Run-off management Off-shore Support functions Operational Excellence Procurement Risk Management AXA University… Networking

21. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples • IT Service Delivery, AXA Tech

22. AXA Tech a global company for service delivery within AXA • Client Base: 17 AXA Companies in 11 countries in 3 regions • 2,179 Employees and contractors Worldwide • 2003 budget: 642 Million Euros Europe South France Belgium Spain Netherlands Italy Europe North Germany U.K. North America / Asia Pacific U.S. Australia Canada Japan

23. 800 746 642 60 582 Cost savings of around 20% in two years AXA Tech* Expenses 2001-2003 900 800 700 600 Business Projects 500 Million Euros 400 Operations 300 200 100 0 2001 Baseline 2002 2003 *incl. Holding and on a comparable basis

24. Rationalization of the infrastructure

25. Global deals • Global Network : FT-Equant • IBM for Infrastructure on demand • Transform fixed cost into variable costs • Go from 8,000 servers to 2,000 • Dell, Global Desktop Standardization Program (Hardware and Services)

26. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples • Reinsurance, AXA Cessions

27. AXA Cessions, Six activities to protect the Group and improve the technical performance Optimisation of Economic Capital / Reinsurance

28. Risk transfer - general principles Sub 1 Subsidiaries define their protection and place all their reinsurance to the Pool Sub 2 Sub 3 Axa Cessions Gross premiums €350 M Direct Retrocessions €65 M Pool Transformation Group Covers 165 M€ Retention 120 M€

29. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being a global Group • AXA Model • Examples • Procurement

30. Procurement - a strategic function • Lower costs: • The Procurement team must strongly contribute to the cost reduction Group program • Support the business: • Procurement have to negotiate not only the best prices but also the best service • Secure delivery: • The business must get what it has requested: the right implementation of the contract is also part of Procurement responsibility. • Develop sustainable and ethical relations with suppliers • AXA is incorporating economic, social and environmental practices in Request for Proposal and contracts commitments • AXA is committed to maintain quality relationships by respecting the code of purchasing conduct (neutrality, fairness, transparency), the terms of payment and ongoing dialogue • AXA expects from its suppliers a strong support to optimise services (quality, innovation and productivity)

31. Back in 2000, procurement was handled locally

32. Today, our approach is global Set up in each main company a centralized Procurement organization Set up a Group Procurement team at the Headquarters Work as a network at worldwide level • Globalization is the only way to get BEST PRICES from the Best suppliers in consolidating volumes and negotiating global contracts • Position the AXA Group as a key and preferred customer

33. Professionalism, another advantage of globalisation • Share experiences and expertise • Use the same processes and the same tools based on Group best practices (ordering system, data warehouse, contract database, …) • Apply the same savings calculation methodology in order to be able to benchmark our performance • Guaranty in all AXA companies the same high level of transparency and integrity

34. AXA works with industry leaders under a global contractual approach bringing strong benefits Global Contracts signed Additional savings opportunities Service/product Registered savings Service/product Expected savings Travel 10% Premises 6% Professional services 15% Office printing 20% Desktop systems 15% Professional services/IT 15% Telecommunications 25% Car fleet 10% Software 5% Damage restoration 3% Infrastructure on demand 10% Glass breakage 15% Office supplies 15% As a result of the already-signed contracts, AXA saves between €100-200 M annually, a part of which go to AXA Tech.

35. Agenda • Operational excellence • Context • Our answer – AXA Way • The benefits of being global Group • AXA Model • Examples • Top executives management, a new leadership

36. How we behave will be the primary and main driver of AXA will performance in the coming years …

37. …because how we behave willdirectly define 60 to 70% of the attitudes and behaviors of the 100,000 AXA employees we are leading References: Daniel Goleman, Richard Boyatzis, Charles O’Reilly, Annie McKee, Ed Schein, …and many others

38. Which leadership for superior execution? Strive For Operational Excellence To Get On The Podium Locally Primarily In Product Innovation Underwiring, Pricing, Claims Management, Investment Performance Distribution Management Quality of Service Productivity Leveraging Group Resources and Human Capital Drive Revenue Growth, Margins and Productivity Superior Value Creation For All Stakeholders

39. Deepen AXA’s current leadership model To deliver today’s performance and To build a legacy for future performance leadership challenges AXA Values • Professionalism • Innovation • Pragmatism • Team spirit • Integrity • Build our organizations • Focus on customers • Stretch performance • Collaborate with others • Lead by example

40. AXA leadership management tools LEADERSHIP Development Performance Appraisals Competency-based selection Executive compensation Organization and Talent Reviews Employee surveys (Scope) Career Management 360° Feed-back Leadership Development Programs

41. Thank you / Questions?