Thomas Buberl, the new chief executive of AXA, is hoping his time at the helm of the French insurance giant goes more smoothly than his flight into London.
AXA has just posted its annual results and Buberl has jetted into the capital to present its figures to the City. His flight, however, has been buffeted by the storm called Doris in the UK, the so-called “weather bomb” battering Britain and northern Europe which, by coincidence, is called Storm Thomas in France.
Buberl, braced to face analysts’ questions about AXA’s numbers, jokes that the results “were much better” than his journey.
It is his first time delivering AXA’s full-year figures, and the trim, 43-year-old German skiing enthusiast concedes he has big shoes to fill.
AXA’s former chief executive, the charismatic Henri de Castries, led the company for 17 years, turning it into a genuine global financial giant.
“It’s very intimidating,” Buberl admits. “But in the process of the handover he’s given me many pieces of advice. One piece was, ‘Be yourself and be authentic, don’t try to copy anybody else’. I’ve followed this advice every day.”
Buberl, who took charge at the start of September, is off to a solid start. Revenues surpassed €100bn (£87.2bn) for the first time and net profits rose almost 4pc to €5.8bn last year. While that missed analyst estimates of about €6bn, Buberl is optimistic about AXA’s prospects.
He certainly has an ambitious task ahead of him. Under his celebrated predecessors, de Castries and Claude Bébéar, Paris-based AXA grew to become a global force in insurance and asset management. It now has some 165,000 employees and is Europe’s second-biggest insurer, with significant operations in the UK.
In Britain alone it employs some 12,360 people. Its main businesses are AXA Insurance, which focuses on property and casualty and which writes some £2.5bn of premiums each year, and AXA Investment Management.
Buberl says his task is to steer the company through its next phase, which “will be about the question ‘How do we transform our business?’”
Under Bébéar, AXA’s founder, the business grew from a small French mutual to a leading insurer through a series of acquisitions. De Castries then expanded the insurance business into a broader financial services giant. But while his predecessors favoured deals to fuel growth, Buberl plans to steer clear of big purchases.
Instead, he has laid out his Ambition 2020 strategy, a five-year plan launched last year to bolster the company’s earnings per share growth by three percentage points to 7pc a year. With investment yields falling and the wider insurance industry struggling to find growth, Buberl is seeking to lift the insurer’s profits through cost cuts and by targeting higher margin products.
As part of the overhaul, he wants to slash €2.1bn of costs, which he concedes has rattled staff. “The hardest part of the job is to motivate the staff for the transformation, because often transformation is being seen as something negative,” says Buberl, dressed sharply in a dark suit, and sitting at a conference table in AXA’s City offices, a short walk from the Bank of England.
His plan, the AXA chief says, is about trying to make the business “more customer friendly” and expanding its operations by attempting to “leverage our know-how beyond insurance”.
Buberl uses AXA’s medical insurance business in the UK as a case in point. “Today we have a vast medical network,” he says. “We know who are the best doctors, which doctors are performing well. Why are we not giving this know-how to our customers?”
With the cost of treating chronic diseases rising, the NHS is wrestling with many of the same problems as AXA, Buberl argues. “We know where the inefficiencies in the system are,” he says. “When I speak to the CEO of the NHS, and I did it the other day, we have the exact same issues. And so at some point the question will come up: ‘Does it not make sense to join forces and work on the topic?’”
Asked whether his hope is that AXA will one day strike a partnership with the NHS, he immediately replies: “Yes.” By expanding into new areas, “my wish would be that in 10 years there is more employment in insurance than there is today”, Buberl says, deftly swerving the question of how many job cuts his Ambition 2020 plan will entail. “I really hope not many jobs will be lost.”
Indeed, he insists that his revamp will focus on retraining staff, particularly for the digital age, as well as cutting costs. Employees will have to pick up new skills, for example switching from answering phones in a call centre to communicating with customers through Facebook Messenger. “We have reserved a large budget to retrain our staff and to really make our staff successful in the transformation,” he says.
Buberl, an alumnus of the prestigious Boston Consulting Group (BCG), has plenty of experience overhauling companies. Originally from near Dusseldorf, he studied for an MBA at Lancaster University (where he met his wife) and then completed a PhD, which focused on prices in the US bond markets, at the University of St Gallen in Switzerland.
His first job was at BCG, which he joined in 2000 and where his projects included working for the lingerie firm Victoria’s Secret.
Buberl then moved to Winterthur, the Swiss insurance company, in 2005 before switching to Zurich Financial Services three years later, where he was the chief executive of its Swiss operations. He arrived at AXA in 2012, where he led the German business AXA Konzern, before rapidly rising through the ranks to be annointed as de Castrie’s successor in March last year.
The Ambition 2020 plan was unveiled just days before Britons went to the polls to vote in the EU referendum last June, when Buberl was “full of hope that Brexit wouldn’t happen”.
Now that Prime Minister Theresa May is gearing up for exit negotiations with Brussels, Buberl, like other executives around the world, is waiting to see what sort of deal London thrashes out.
“My preference would be to stay here as much as I can,” he insists, when asked whether he is preparing to move British operations back to the continent.
The UK domestic insurance business will have to remain in Britain irrespective of the deal that is agreed between Britain and the EU.
The UK, Buberl says, has long been a fiercely competitive market for insurance, which has served to spur innovation, and he believes it will stay that way.
“A lot of the things that we have invented here are being copied elsewhere: that will not change, whether there is Brexit or not,” he says.
But keeping AXA’s international operations in Britain is another matter, and they could be switched to either Germany or France. The rights of EU citizens in the UK will be key.
“We obviously have a lot of investment management here,” Buberl says. “We have other international operations here. We obviously also employ quite a few non-British people, so we have to see how Brexit will pan out.”
Paris is often cited as a destination for international financial firms that have based their European operations in London, but which are now planning to move jobs to the continent to ensure they retain access to the EU’s single market.
Buberl says: “It is clear when I look at the activity in Paris, in terms of applying for licences, it seems there’s quite a bit going on”, mainly among asset management firms.
But despite the potential disruption, he believes the UK leaving the EU should not knock AXA off the five-year course he has plotted in his 2020 plan.
“We have separated what’s in our hands and what’s not in our hands,” he says, when asked whether Brexit will affect the overhaul.
It is now up to Buberl to steer the company clear of any turbulence.