AXA Aims for Strategic Growth in Brazil’s Insurance Market

AXA is nearing its goal of R$2 billion in revenue in Brazil, achieving R$1.9 billion in 2024. The company is focused on expanding in corporate insurance, promoting environmental initiatives, and enhancing social inclusion through targeted insurance solutions. Despite their expertise in health insurance, AXA remains cautious about entering this segment in Brazil. They are proactive concerning climate change risks and their impact on insurance claims, advocating for preventive measures. Globally, AXA reported an 8% revenue growth in 2024, reflecting a strong market position.

AXA, the prominent French insurer, commenced operations in Brazil in 2014, aiming for R$2 billion in revenue by 2024. As of this year, the company reported R$1.9 billion in revenue from written premiums, marking a nearly 12% increase from the previous year. AXA’s CEO, Thomas Buberl, acknowledged their progress toward this goal: “Our plan now is to move from a still small position to a stronger one in a country with a solid population base and strong fundamentals.”

During his recent visit to Brazil, Mr. Buberl outlined three pivotal strategies for local expansion: boosting its market share in corporate insurance, developing products that facilitate the green transition in Brazil, and promoting social inclusion by providing insurance solutions for previously underserved consumers. Despite exploring opportunities within health insurance, AXA does not currently plan to enter this segment in Brazil due to the market’s consolidation and existing competition.

Mr. Buberl highlighted the necessity of differentiating AXA’s offerings if they were to venture into health insurance, given the market’s established players. He noted, “However, in Brazil, the health insurance market is very consolidated.” AXA is also vigilant on the ramifications of climate change, particularly in light of recent disasters, such as the floods in Rio Grande do Sul. These floods resulted in R$6.08 billion in claims, a figure comparable to the financial impact of the COVID-19 pandemic.

As climate events become more common, Mr. Buberl underscored the importance of investing in risk prevention and mitigation measures. He elaborated on the benefits of damage prevention by referencing historical hurricane impacts in the United States, stating, “Consider two hurricanes in the United States—Katrina (2005) and Irma (2017). Both followed similar paths, but costs declined significantly over those 12 years because prevention measures improved.”

In addressing recent wildfires in Los Angeles, he observed the resilience of concrete buildings compared to wooden structures. This highlighted the importance of preventive measures to mitigate losses: “It’s heartbreaking to see people suffer, especially knowing that some of these losses could have been prevented.” He concluded that insurers have a crucial role in keeping cities “insurable” through proactive risk management techniques.

In 2024, AXA’s global revenue increased by 8% to €110 billion, and net profit rose by 11% to €7.9 billion, demonstrating the company’s robust performance despite challenges in various markets.

In summary, AXA’s strategic plans for expansion in Brazil are centered around market share growth, product development for the green transition, and social inclusion. The company remains cautious regarding entering the health insurance sector due to the highly competitive landscape. Additionally, AXA places significant emphasis on addressing climate risks and implementing preventive measures to protect communities. Their success is reflected in their impressive financial growth worldwide, positioning them favorably in the global insurance landscape.

Original Source: valorinternational.globo.com