AXA expects doors to openAXA Direct Korea acquired EGRO Daum to enhance its proficiency and presence in the domestic market while also diversifying its distribution channels, its parent company said yesterday.
“This helps us reinforce our position as the leading player in the market,” said Xavier Veyry, president and CEO of AXA General Insurance, at his first press conference in central Seoul.
He described Korea as a strategic market and said the company will move to integrate its sales structures for direct and non-direct insurance policies.
Korea’s financial authority approved the acquisition in September, and the process was wrapped up earlier this month.
While both companies exclusively sell non-life insurance policies online, AXA took advantage of this to become the first insurer here to sell discounted policies. The market has since grown exponentially.
The market for direct automobile insurance jumped from 25.6 billion won ($23.2 million) in 2001 to over 3 trillion won last year, when sales of direct policies grew to account for 25 percent of the total automotive insurance market.
This comes in stark contrast to 2001, when it only made up 0.4 percent.
AXA is now facing stiff competition as the number of companies that exclusively sell policies online has climbed to 11.
Veyry said the rapidly changing market environment, including tighter consumer protection policies, the deepening global financial crisis, falling profit margins, more large insurers, a wider distribution of smartphones and increasingly savvy consumers, is making it more difficult to do business.
To beat these obstacles and expand its direct insurance sales through the Internet and by phone, AXA plans to turn EGRO Daum into a non-direct insurer. Veyry said the goal is to find a new and very different distribution network.
By Lee Ho-jeong [firstname.lastname@example.org]