Yujin Gao, Tsinghua SEM Master’s in Management Class of 2018

This article is part of a series covering Tsinghua Student Dialogues with Advisory Board Members. These dialogues took place on October 20, 2016, in association with the larger Tsinghua SEM 2016 Advisory Board Meeting.

AXA Group Board Chairman Denis Duverne dives deep with Tsinghua SEM students on the opportunities and social responsibilities that accompany global leadership in the insurance industry. 

Denis Duverne, Chairman of the Board, AXA Group, joined Tsinghua SEM students in the classroom and offered compelling insight into how insurance contributes to economic development. Mr. Duverne opened by introducing the broader value of insurance in relation to the economy, finance, and society. He gave a detailed overview of how insurance boosts economic growth, stabilizes economic and financial cycles, and distributes welfare both vertically and horizontally. With respect to future prospects, Mr. Duverne pointed to the challenges and opportunities confronting the industry as well as the practical limitations of insurance.

One memorable takeaway from Mr. Duverne’s dialogue related to InsurTech, which he suggests “starts to cover the full insurance value chain.” He compared InsurTech to FinTech: InsurTech utilizes mobile applications and new technology to transition the conventional insurance industry to one that is equipped and populated with brand-new business models. He pointed out that at present, the Property & Casualty category accounts for 36% of InsurTech investments, top among all insurance products in InsurTech’s portfolio. To stay current in its innovation, AXA also pays much attention to building an innovation ecosystem and carrying out corresponding strategies. The company fosters and supports in-house innovation, establishing dedicated AXA labs to observe and probe external innovation, invest in adjacent businesses, and partner with leading startups.

Another focal point was Mr. Duverne’s description of the poverty trap. It is widely acknowledged that poor people most in need of insurance are often those with least access to it. Therefore, Mr. Duverne noted that a point of emphasis for AXA was to pursue better solutions to tackle this issue. To this end, Mr. Duverne is part of the Insurance Development Board, which was created this year at a global level in coordination with the United Nations and the World Bank. The group is aimed at providing insurance for 400 million more people than are currently insured. Countries facing natural catastrophes with no or minimal insurance protection will be offered an insurance mechanism, to be funded in part by government aid agencies, through which Western governments contribute roughly 0.5% of their GDP for international aid, with leading insurance companies like AXA and others also committed to shouldering a share of responsibility.

During an engaging Q&A session, Mr. Duverne offered compelling insight into a variety of student inquiries. He drew from his previous work experience in France and the U.S. and and shared more about the differences between working in Europe and in America. He praised the high efficiency of the U.S. while acknowledging the uniqueness of France’s own styles of organizational culture. In response to one SEM student’s question regarding the slowing of China’s GDP growth rate and the corresponding significance for the expansion of China’s insurance industry, Duverne pointed out that China’s insurance industry had witnessed a growth rate of 30% this year, in contrast to national GDP growth of approximately 6.5%, signaling the growth potential of the Chinese insurance market. Hence, AXA considers the Chinese market to be a strategic one and invests significantly on this assessment. For example, he noted a partnership with ICBC – the world’s largest bank, with 16,000 branches in life insurance – and Shanghai-based Tianping in the P&C domain. On the question of present challenges in the insurance industry, Mr. Duverne underscored that the insurance market depends too heavily on interest rates. Although interest rates are falling to unprecedented global lows, AXA desires to reduce this dependence by emphasizing more of the unique features of insurance, such as its protectionary functions. From a savings perspective, insurance may be competing with asset management companies or banks, but from a protection perspective, insurance offers a unique kind of service.

By the conclusion of the dialogue, Mr. Duverne had offered a wide range of profound insights into the insurance industry, as acknowledged by students’ warm reception and ongoing engagement after the end of the formal conversation. Mr. Duverne’s influential and inspirational insight was a consistently welcome element and theme of the larger sequence of Advisory Board student dialogues, and Tsinghua SEM enthusiastically anticipates his return in 2017.