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Unit 6: Customer Retention

improvement program that focused on improving the existing processes and making Notes
them more customer-oriented. The case also describes the benefits reaped by AXA after
implementing the program including cost reduction and customer retention.
Improving Customer Satisfaction
France based insurance and investment management conglomerate; AXA Group3’s
operations were spread across the world. In the year 2001, the company’s German operations
had some difficulty in retaining customers.
The company conducted a survey and found that although most customers wanted to
obtain accurate information about the loss and claims processes, in writing, only 22% of
the company’s customers were actually receiving such information. The customers also
expected to receive such information within the span of one week. However, in most
cases, AXA Germany was unable to provide the information in the specified time frame.

The main reason was that the processing of claims in the company was geared to the needs
and ease of operations of those working in the company, rather than the needs and
preferences of the customers. To overcome this problem, a team from the company took
feedback from customers on claims-related services being provided to them. Having
understood their requirements, the team devised a specimen letter, which informed the
customers about how their claim was being settled, the details of the employee from AXA
who was looking into the matter and how to go about settling their claims.
Letters on these lines were, from then on, dispatched to all the customers who filed for
claims. The result of these efforts was instantaneous. The number of calls the customer
service center received about claims-related information reduced by half. The retention
rate increased, and customers came back to AXA. The change in the company’s outlook
towards its customers could be attributed to ‘the AXA Way,’ a continuous improvement
program launched by AXA in 2002, to achieve operational excellence and bring about
changes in its business processes based on customer feedback.
The parent company of AXA, Mutuelle Contre de l’Assurance contre l’incendie (MCI), was
founded in 1816 by Jacques-Théodore le Carpentier and 17 other entrepreneurs. The
company was located at Rouen and was established as a fire insurance company. For a
period of five years, every shareholder in the company was both insurer and insured
party. This was the beginning of a mutual company, where the company was owned by
insured parties. With growing competition from companies like La Providence (founded
in 1838) and La Paternelle (founded in 1843), MCI decided to diversify and develop its
activities.
For this purpose two companies were created, Mutualité Immobiliére and Mutualité
Mobiliére for insuring movable risks; these companies started operating in 1847. In the
1850s, the companies expanded their activities across France and started covering real
estate risks. In 1881, the companies merged under the name Ancienne Mutuelle (AM).

In 1922, AM began offering automobile insurance under the name – AM Accidents. During
the Second World War, in 1944, the company’s offices were bombed by US forces. The
accident and life insurance divisions were not severely affected by the war, but tighter
controls became necessary. This led to constitution of Groupe AM in 1946, under the
leadership of André Sahut d’Izarn. The company’s first merger, with AM du Calvados,
took place in 1946. In the following decade, AM acquired Mutuelle d’Orléans, Mutualité
Gérale life insurance company and La Participation. In 1955, AM ventured overseas, starting
its operations in Quebec, Canada. In 1958, Claude Bébéar (Bébéar) joined the group as a
senior manager.
Contd...

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