Invest KOREA

Selling More Than Insurance

AXA Direct Korea has its customers covered, in innovative ways

One of the first things Xavier Veyry did after becoming the president of AXA General Insurance Co., Ltd. in Korea was make his staff listen to their customers. Literally. He had the 300 people at AXA’s Shindaebang-dong headquarters visit the company’s seven call centers nationwide to put on headphones and listen.

Sure, customer service is important in any business. But as far as Veyry is concerned, it’s especially important for the Korea operations of AXA, also known as AXA Direct Korea, because they sell insurance on the phone and online. Without face-to-face interaction, they sell a promise.

“We sell the promise that if you have an accident, we will pay your claim,” said Veyry, who joined AXA Direct last fall. “At AXA we demonstrate that basically when we sell a promise, we respect our commitment.”

AXA Direct’s 1,600 employees demonstrate this by arriving at the site of an auto accident 24 hours a day. They staff their call centers with mostly women, as the aim is to develop a closeness with customers and women have been found to be better at this than men. The staff is also “very Korean.”

“A big mistake would be to say that we know from the outside how to run a business in a given country,” said Veyry. “We need to be close to [the] customers, close to the environment and close to the culture. This can be done through the local people.”

AXA Direct opened its doors in 2001 but was known then as Kyobo Auto Insurance. It became the first insurance company in Korea to develop direct insurance, or insurance sold through the phone or Internet. Kyobo is no longer a shareholder, as the company became AXA General Insurance Co., Ltd. in 2007 and is now almost entirely AXA-owned.

The company provides mainly auto insurance, but also personal accident and medical coverage. It has 11 claims service centers nationwide and 1.2 million contracts, which corresponds to 900,000 customers. Sales in 2011 reached 560 billion won ($483.6 million). The AXA Group, a France-headquartered insurance and asset-management group of which AXA Direct is a part, has operations in 61 countries and 95 million clients.

Korea’s direct auto insurance market is now one of the largest in the world, Veyry said, with only the UK and the U.S. having a higher percentage of vehicles insured through direct insurance than Korea. AXA Direct, having opened the domestic direct insurance market, had much to do with this growth. Today, direct insurance represents 25 percent of Korea’s auto insurance market, and AXA Direct represents about 20 percent of the direct insurance market share.

“So the pace of development of motor direct insurance in Korea has been absolutely tremendous and very very fast,” Veyry said. “I think this is partly due to the fact that Korean people are extremely curious but also they are a technologically savvy people.”

Direct insurance uses new technologies to sell policies. Widespread Internet and smartphone use among Koreans makes them highly receptive to AXA Direct’s distribution mode.

Veyry has also found that Korean consumers know what they want and have high expectations regarding service and prices. To meet these demands, AXA Direct’s staff designs products that are easy to subscribe to and manage and cooperates with the Korean government’s pursuit of environmentally friendly auto measures.

Having celebrated its 10-year anniversary last fall, AXA Direct plans to grow its business portfolio to include general property & casualty, health and travel insurance and to continue focusing its customer service on a “strategy of proof.”

“This is the key moment of truth where we will be able to demonstrate that basically [customers] made the right choice in coming to AXA,” said Veyry.