Value context and insight. lkm@koreatimes.co.kr
'If you succeed in Korea, you can make it anywhere'
AXA Korea CEO Gilles Fromageot / Korea Times photo by Choi Won-suk
By Lee Kyung-min
AXA seeks to merge healthcare, lifestyle, and insurance services
By Lee Kyung-min
Korea is a tough market for foreign insurers. In a market that is nearly saturated, consumers with high standards are sophisticated, exacting and demanding. The service needs to be perfect. This is why attaining success in Korea is a sure sign that a similar outcome can be achieved in other countries, according to AXA Korea CEO Gilles Fromageot.
“It is true that satisfying Korean consumers is not easy. A product and strategy proven to be successful in Korea will likely succeed in other countries. Getting recognized in the Korean market is not easy, but at the same time, it could be a guarantee of success elsewhere,” he said in a recent interview with The Korea Times at the insurer's head office in Seoul.
The Fraud Detection System (FDS) is among many valid cases in point, according to the 45-year-old French executive.
Distinguished by its speech analytics and text mining techniques, the current system underwent a continued upgrade and has been in full use since 2012.
The insurer with about 1.2 million customers in Korea said identifying a repeated pattern of word use was vital to developing the program.
“FDS agents are required to preserve messages exchanged with customers in text for further reference. Our data found that certain frequently used words were closely associated with fraudulent claims. Exchanges of such words are flagged real-time and lead to an immediate investigation with greater focus on verifying the claims for fraud,” he said.
Given around 8 percent of the total payouts are fraudulent, the system not only saves money but also helps ensure a quality service for customers.
“False insurance claims continue to reach an all-time high in Korea every year, but we have been able to reduce fraudulent claims significantly thanks to our FDS,” he said.
According to data from the Financial Supervisory Service, fraudulent insurance claim payouts hit a record high in the first six months of 2018.
The amount stood around 400 billion won ($330 million), up 7 percent, or 29.7 billion won from a year earlier.
The program developed by AXA Korea has set a new example for insurers globally and been benchmarked by other AXA entities across Asia and Europe.
“Europe's standard FDS is developed based on AXA Korea's model, and AXA Direct Japan and AXA Hong Kong have implemented the standard FDS,” he said.
The advancement enabled by data analysis is in line with the firm's initiative to become a leading digital entity.
“We are a tech-led company, and digital is part of our DNA,” he said. “We are keen on staying up to date with machine learning and artificial intelligence (AI), to steadily improve our online subscription process. For example, automating our claims assessments and improving customer service using chatbots. We are also establishing a system that provides customers with an analysis and diagnostic of their current covers to ensure they are getting the protection they need, using big data and AI.”
The CEO stressed that Korea is well-positioned to maximize its unique position to facilitate digitization, a much-attainable goal given the large proportion of highly skilled, highly prepared personnel.
“Korea with its high mobile penetration rate has very advanced infrastructure, especially in information technology, as well as a great ecosystem of startups, which relies on this cutting-edge infrastructure and on the innovation mindset of the young generation. The government should spare no efforts to ease the business environment and to reduce excessive regulations, which sometime have been a brake to innovation,” he said.
Niche player seeking growth
AXA Korea under his leadership is transforming itself from a direct motor insurer to a diversified, multiline insurer and a health plans provider.
“We are now providing solutions in a wide range of lines of business including health product line-up and long-term Home-Fire products. This diversification strategy will allow us to secure profits, and the size of our business and our market capitalization will naturally grow following improved brand recognition,” said Fromageot who has been AXA Korea CEO since April 2017.
He also served as the firm's chief financial officer (CFO) and corporate secretary from February 2010 and August 2015.
The firm is preparing for a platform that will help customers lead health-conscious lives by providing guidelines on everyday food choices and workout routines.
The platform, he believes, will become one of the firm's key assets as it will enable closer customer relationship building, a step towards becoming a lifetime partner rather than a mere payer of insurance claims.
“AXA Korea wants to become a true lifetime partner of our customers that provides the right solutions and services at any point in time. This will help not only prevent accidents but also minimize risks, which in turn will relieve the fear associated with such occurrences and focus on now rather than what has not happened. Protection is good, but prevention is even better,” he said.
Apart from his job as CEO, his lifetime goal is to contribute to raising awareness of socially important issues.
“I am passionate about humanity threats and societal challenges, such as climate change, healthcare access for the underprivileged, micro-insurance needs in underdeveloped economies and fast-aging population implications. I feel a profound need to help finding solutions for these challenges, and my lifetime goal is to give the world more than what has been given to me,” he said.