Page 89 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes Bébéar was sent to Canada on an assignment and he developed the Canadian subsidiary of
AM named Provinces Unies. After the death of André Sahut d’Izarn in 1972, the company
went through a turbulent period. In 1974, activities at AM were paralyzed for over two
months, owing to a strike in the company. Bébéar’s successful resolution of the strike
impressed the board members and he was brought in as Chairman in 1975. Bébéar brought
in several changes beginning with a change in name of the company. AM was renamed
Mutuelles Unies (MU) in 1978. In the same year, MU acquired another French company,
Compagnie Parisienne de Garantie.
The Problems
The late 1990s and early 2000s presented many challenges for the global insurance industry.
Major events that affected the global economy were the oil price hikes in 1999 and 2000,
and the burst of the speculative bubble in technology stocks. The year 2001 witnessed a
global economic slowdown, which resulted in a decline in corporate earnings. The
insurance industry was among the worst hit and underperformed the general indices.
Lower equity returns, low interest and high default rates – all had a negative effect on the
industry. The September 11, 2001 terrorist attacks in the US resulted in total insurance
claims of over US$ 70 billion.
The AXA Way
AXA had set priorities which included strengthening the group’s businesses in most
developed and high potential markets like Western Europe, North America and in selected
countries in the Asia Pacific region. Another priority was to achieve operational excellence
in each market by leveraging organic growth and improving quality and productivity.
In 2002, when AXA measured its customer satisfaction, the score was 53, with defaults at
about 20%, thus presenting great scope for improvement.
Reaping the Benefits
By the first half of the year 2005, AXA had more than 400 Black Belts and 10,000 employees
had been sensitized to the AXA Way. By then, the AXA Way had been launched in 23 of its
companies which accounted for 90% of the group’s revenues. The implementation of the
AXA Way helped in improving customer satisfaction at AXA. This was revealed through
the Scope survey on customers conducted in 16 countries, which accounted for 94% of
group’s revenues. Customer satisfaction on servicing had increased to 69% during the first
half of 2005 as compared to 64% in the corresponding half of the year 2004.
Questions

1. Find out the systems employed by AXA to improve the quality of its services.
2. What are the benefits of process improvement and making services customer-
oriented?

Source: http://www.icmrindia.org/casestudies/catalogue/Operations/AXA%20Way-Quality%20
of%20Services-Operations%20Case%20Studies.htm
6.6 Summary

Customer retention is the key to any organization’s effectiveness. Customer centric
approach to marketing program helps retain customers and win back lost customers.

Relationship marketing is emerging as the core marketing activity for businesses operating
in fiercely competitive environments.

Customer Retention is the activity that a selling organization undertakes in order to
reduce customer defections.

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