By Yoon Ja-young
Staff Reporter
For Guy Marcillat, president & CEO of Kyobo AXA Auto Insurance, the Korean insurance market is a thriving network for business.
``You can't be a world leader without having a strong presence in Korea. It is a strategic necessity,'' Marcillat said in an interview with The Korea Times.
AXA, one of the top three insurance groups in the world, acquired the non-life insurance arm of Kyobo and changed its name to Kyobo AXA Auto Insurance in May. AXA recorded 99.6 trillion won total sales, operating businesses in 41 countries during the fiscal year 2006.
He said the French insurer was amazed by the achievements that Kyobo had made with little investment, marketing or recruitment efforts. He compared the insurer to a sleeping beauty awoken after a kiss by AXA, which will eventually grow more attractive to the market with minor embellishments, or aggressive investment by AXA. ``We are going to inject a lot of money for marketing, new products, new services, and recruit people at the same time.''
Marcillat is an expert in the Asian market, who built up most of his career in Japan, serving as CEO of pharmaceutical and perfume companies and AXA Japan. He is currently serving as chairman of Japanese AXA as well. He said Korea and Japan would remain top priorities for the coming ten years, at least.
``The Korean market is perhaps less sophisticated than the Japanese market in terms of underwriting and regulation, but it is much more advanced in the field of IT.'' He said the company's direct business should grow quickly in Korea, one of the most wired countries in the world. Direct products take 15 percent of the auto insurance market in Korea, while the ratio is around 4 percent in Japan.
Marcillat expected a win-win situation by bringing in the insurer's know-how in Japan and exporting their skills built up in Korea. The Chinese market, however, doesn't seem very attractive for now, he said, and added that AXA would focus on Korea and Japan.
He expects regulators to open up more parameters for insurance premium segmentation, in which AXA has a competitive edge. AXA was the first to segment subscribers by their driver's license colors in Japan, which represent whether they are good or bad drivers. ``The Japanese financial regulators accepted us, and now every insurer is doing the same thing. I think it's normal that bad drivers pay more than the good drivers. We should think about the interests of the public.'' Korean auto insurers have been suffering a high loss ratio, and they have partly attributed it to the lack of segmentation.
One of the biggest tasks for the insurer is to make the name AXA known here. It plans to use the name Kyobo, already widely known, with AXA for some time to come. ``We need a certain period of time to explain to people that AXA is one of the best in the world.'' The insurer is preparing a massive promotion plan.
Regarding market share, Marcillat said he thinks more of providing perfect services than simply raising market share.
``It is easy to sell insurances, but it is only a start. The most difficult part is to serve customers, managing a contract through their life cycle. There comes renewal, change of product, the subscriber getting married and then you should include the wife in the policy.'' He said AXA wishes to serve them perfectly all the way through.
He stressed that direct insurers can provide ideal services despite charging less. ``The cheaper price comes from segmentation, not from poor service. We have a huge claims network, in 39 locations all over Korea. I would tell the customers `Please come and test us. Call us and see our services.''
Born in Sfax, Tunisia, in 1949, Marcillat holds a Ph.D in biochemistry. He loves visiting corners of Insadong Street in downtown Seoul, and paints on weekends. The French CEO, who says localization is his philosophy, already has a taste for jokbal (pork-hock) and carries Korean vocabulary cards.