Southeast Asia, Greater China and Japan will remain the three pillars of Axa Group as it grows its business in the coming years, the Paris-based insurer says, noting that the Thai insurance industry is poised for an upward growth trend from 2022 onwards.
In an exclusive interview with the Bangkok Post, chief executive Thomas Buberl said Asia now contributes roughly 20% to Axa Group worldwide, and the contribution is likely to increase given the immense potential of the continent and a forecast of slower growth in other parts of the world.
"We believe that the business in Asia will continue to grow," he noted during a visit to Thailand to celebrate the 25th year of KTAXA, a joint venture with Krungthai Bank.
"Asia is a vibrant region with the middle class rising. As well, the uncertainties around us cause people to make sure they are well protected. An ageing society is certainly an issue. As we live longer, we need to prepare better. It's a notion around how can we prepare ourselves to have a healthy ageing."
Mr Buberl pointed out that the Asia region has immense potential for the Axa Group.
In Asean, Axa operates in Thailand, the Philippines and Indonesia, through joint ventures with local banks. In late August the French multinational company completed the sale of its Malaysian insurance operations to global insurance and asset management firm Generali.
"In Malaysia, we had a very specific situation when our joint venture partner wanted to do something differently and so we decided together to sell the company, but this is something very specific for Malaysia," said Mr Buberl.
In Thailand, KTAXA ranks fourth in terms of overall market share but is No.2 in new business as it gains more market share. The insurance industry, Mr Buberl said, is poised for an upward trend from this year, driven by economic recovery, increased health awareness, and the country's ageing population, which is supporting the demand for life and health insurance products.
According to a recent study by Global Data, Thailand's insurance industry is expected to grow at a compound annual rate of 4.7%. The total insurance industry growth will be mainly driven by the life and pension insurance segment, which accounted for 69.3% of gross written premiums in 2021.
"Thailand's population is rapidly ageing," Mr Buberl said, revealing that in 2021, the proportion of the country's population aged 60 and above was almost 20%. That is expected to grow to 26.6% by 2030, which will spur the growth of life and health insurance products over the coming years.
"Across Asia, the markets are growing quickly. In Thailand, there is still a lot of unsatisfied demand for insurance. The penetration is still relatively low, and awareness of insurance needs is increasing among the Thai population, as medical costs rise and customers become more aware of the importance of health insurance," Mr Buberl said.
Many people also recognise that there are strong tax benefits from getting a life or health insurance policy, which would continue to support market growth, he added.
KTAXA currently has 15,000 agents in Thailand and aims to grow the number further. To strengthen its competitiveness, Axa is putting its efforts into offering the right products to customers, and growing the franchise with a workforce that is young, energetic and motivated, Mr Buberl said.
Besides business ambitions, Axa has been very active in its contributions towards tackling climate change. The company is pursuing climate change initiatives such as implementing a low carbon strategy, investing in green assets, and engaging in responsible investments by divesting coal and tobacco.
"Axa's climate change policy started very early in 2015, when the debate was not very related to our business," said Mr Buberl.
"Normally investments in coal and tobacco bonds give good yields, but on the other hand it can lead to catastrophes like big disasters and many people suffer because of climate-related topics. Then the additional yield on the coal investment is not justified when you look at the claims that you have from the health catastrophe.
"Therefore, we say we need to stop this and that's where we started the decision on coal. Then we see the whole debate about climate change became stronger and stronger, which also encouraged us to go much further.
"We would not insure a coal factory. It's a tough decision to make because you are going to shrink your business, but I think it's for a good reason because you are an insurer. The insurers are in the society. They can influence the society and have to take responsibility for that also."
When it comes to new oil investments, Axa focuses only on the companies in transition. "For the companies that don't want to have a transition, they get no financing [from Axa] anymore," Mr Buberl said.
The whole Axa Group, not only the company itself but also the investment portfolio, is aiming to be carbon neutral by 2050. "We will reduce the carbon footprint of our investment portfolio by 20% between 2020 and 2025, and we are now above that target," Mr Buberl said.