Andreas Maier, CIO AXA Winterthur

Winterthur, September 2018

Digital Transformation Story –Streben nach Business Agilität

AXA as No.1 global brand with >100m customers

2 IT Strategy | Sep. 2018

85/100Dow Jones Sustainability Index (DJSI)

64%

%age of AXA companies with NPS at or above their local market’s average

80%Employee Engagement Index

107 M Customers

165 K Employees

No.1Best Global Brand for the 9th consecutive year

64 Countries

Our starting position: AXA is market leader in Switzerland

3 IT Strategy | Sep. 2018

10% of AXA Group’s business, 13% of earnings

#11,9 MillionCustomers

>11 Billion CHF Business Volume

Largest insurance distribution

network with 300 agencies

20% market share

40% with SMEs

#1 in Employer

Branding within AXA Group

4’300 employees +

2’600 in agencies

Why AXA needs to pursue a deep transformation!

4 IT Strategy | Sep. 2018

From 2020 onwards digital natives will make up for the majority of the population in CH

Until 2013

Traditional consumers are in the majority

2013-2019

Digital Migrants

are the majority

From 2020

Digital Natives

are the majority

% o

f th

e a

cti

ve p

op

ula

tio

n in

CH

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Old paradigm Transformation New paradigm

0

20

40

60

80

100

Traditional consumers Digital Converts Digital Natives

Source: Based on PwC study "Profitable growth in the digital age – Unleash your potential“;

Our Vision

5 IT Strategy | Sep. 2018

Moving from Payer1 to Partner2

1. A transactional company

mostly focused on assessing,

protecting and repairing

2. A relationship company mostly

focused on preventing,

empowering and building

Transformation story defined and widely communicated

WE TRANSFORM FROM PAYER TO PARTNER AND HELP OUR CUSTOMERS TO LIVE A BETTER LIFE

NEW CUSTOMER EXPECTATIONS

SHRINKING PROFITS

STRONG COMPETITION

DIGITALIZING OUR CORE BUSINESS

«Growth, efficiency and increased customer proximity through operational excellence»

Our strategy

Our challenges

Our Vision

DEVELOPMENT OF NEW BUSINESS SEGMENTS

Growth by building up ecosystems in health and mobility

CULTURAL DEVELOPMENT

Improved customer experience through more collaboration and innovation

IT Strategy | Sep. 20186

We focus on our 7 strategic objectives…

7 IT Strategy | Sep. 2018

1. WE STRIVE FOR MARKET LEADERSHIP

2. WE ARE THE FIRST CHOICE FOR OUR CUSTOMERS

3. WE SERVE OUR CUSTOMERS INSTANTLY AND WITH OUTSTANDING COMPETENCE

4. WE INCREASE OUR EFFICIENCY FOR STAYING COMPETITIVE

5. WE USE OUR DATA FOR PROVIDING VALUE ADDED SERVICES

6. WE ARE THE MOST INNOVATIVE INSURANCE COMPANY IN SWITZERLAND

7. TOGETHER, WE MAKE THE DIFFERENCE

…and this is how we approach a focused execution

8 IT Strategy | Sep. 2018

10. Agile Transformation

5. IL 2020

3. Customer Satisfaction

through Process Optimization

4. Underwriting 4.0

6. Smart Data

7. Efficiency through

Sourcing

8. Ecosystem Health

9. Ecosystem Mobility

2. Transactional Model

Digitization our core

business

Development of new

business segments

Cultural development

1. Digital Customer

Experience

We strengthen our

position as market leader

Bridging strategic thrusts with a rigorous digital transformation

9 IT Strategy | Sep. 2018

Low High

Low

High

Technology change impacts

Processes,

cultural change

impacts

Tech pioneers

HR pioneers Transformers

Towards an

Agile Organization

Towards

High Tech Shop

DevOps

Product teams

Automated hybrid cloud

Big Data & cognitive

technology

REST API

Modernized Core IT

Agile way of working

Self-organized product

teams

New leadership practices

Diversity and FlexWork

Colorful culture

Disruptive

innovations

F3

Transformational

innovations

F2

Incremental

innovations

F1

AXA Ambition 2020

“We are a self-learning

organization and

master the entire

continuum of digital

transformation”

Towards agile Organization: Why do we need to move?

10 IT Strategy | Sep. 2018

Succeeding in an ever-increasing complex environment

Manage Innovation

cycle

Attract the best talents

Drive customer

value faster

“Ensuring the active management of an ever accelerating innovation cycle”

Form and shape the technological future as a market leader (e.g. chat, AI, machine learning, etc.)1

Monitor and manage innovation lifecycle, inspect & adapt, fail early fail often culture

“Attracting the best talent on the Market”

Develop AXA as preferred global employer

Implement agile way of working and self-organization principles

“Offering mobile convenient customer journey“

Segment-of-one – from individual needs to customer-specific services

Drive digital products and encompassing ecosystems to create a future of choice and freedom

Notes: [1] AXA CH recognized as Digital Champion by Accenture (2015) as well as won silver price @Digital Transformation Award 2017;

Towards an agile organization: what is agile?

11 IT Strategy | Sep. 2018

IT transformation is a key success factor for business agility

Agile CapabilitySensing, responding and learning

Agile Business Capability (Business Agility)

Agile IT Capability (IT Agility)

Agile IT Development

Capability to quickly deliver solutions

and adapt to changing requirements

Agile IT Infrastructure

Capability to manage disruptive, fast

and core IT initiatives

Adaptability

Capability to respond

effectively to changing

demands, threats or

opportunities

Flexibility

Capability to make

changes within the

current organization

Speed

Capability to respond

fast to customers,

market dynamics and

technology options

Scalability

EffectivenessOngoing prioritization of

what ought to be done

Agile IT Innovation Diffusion

Capability to impact business

behavior

Source: Baskerville, R., Mathiassen, L. & Pries-Heje, J. (2005, p. 3–9); Mathiassen und Pries-Heje (2006, p. 116).

Key transformation initiatives driven by IT

12 IT Strategy | Sep. 2018

Cloud and new target operating model driving the tech (r)evolution

Dev effectiveness

Ops efficiency

2015 2016 2017 2018 2019

Cloud foundation (public

managed core IT & SAP HANA)

Agile capabilities & maturity

Product team organization (mindset & skillset),

test-driven development, continuous delivery capability, … (toolset)

“It gets worse before it gets better”

Productivity baseline

DevOps processes

Enable DevOps

processes through

organization transition

2020

Fo

un

da

tio

n

En

ab

ler Culture,

mindset

change

Ac

ce

lera

tor

Capabilities required for agile product delivery 2020

13 Agile Exchange Shell & AXA Switzerland | May 2018

Excelling in all areas will result in faster time-2-market, higher quality & productivity

Automated brokerage & cloud inter-operability

AXA Agile Maturity Model

(A2M2)1

Level 1Initial

Level 2Managed

Level 3Defined

Level 4Predictable

Level 5Optimizing

ProductivityImpact

Level 0Non-existent

Technical excellence

toolset

Automated, self-service IaaS/PaaS

provisioning

Container-based

deployment

Manually managed IaaS/PaaS

Delivery excellence

skillset

Prioritized backlog for improving

feature dev

Matured collaboration

practices & involved team

Continuous delivery &

deployment practices

Continuous customer

value delivery improvement

Project management

methods

People, culture excellence

mindset

Self-organizingteam mgmt. &

leadership education

Optimized self/ peer coaching &

know-how share

Risk-avoiding, plan making &

formal documenting

Target state and ambition 2020 – AXA CH will reach average level 4

Long-term team setup

independent of product LCM

Continuous (re)deploy-

ment

Completed cloud

migration path of all apps

Notes: [1] Based on Turetken, Stojanov & Trienekens (2016); [2] Declared as program, more

initiatives may follow & support transformation journey;

Cloud projects (Gotthard, SAP) Agile2 IT TOM

Product strategy

excellence context

Agile Product Portfolio &

strategy governance

Mature product landscape &

agile ROI-driven budgets

Continuously optimized

product thinking

Long-term planning, roadmaps

Pull-driven portfolio Kanban

processes

Sliced features out of Epics for customer value delivery (MVP)

Collaborating,

standing

product teams

Cross-functional & autonomous

teams

Effect of transformation initiatives on agile maturity

Productivity baseline

Agile prioritization, estimation & Devops proc.

Innovation archetypes pushing the transformation until 2020

14 IT Strategy | Sep. 2018

Tightly aligned IT strategy supporting our business transformation

Disruptive IT

Home protection (smart home)

AXA Sure

Drive Recorder Fleet

DriveAgain, Rent n Share

Houzy

Managed IT

Trigger-based CRM

Digitization and automation of claims

handling (i.e. straight through

processing)

Service center excellence (e.g. robotic

process automation)

AXA Advice tablet apps

Examples (non-exhaustive)Differentiation within business strategy

Lo

w

Low High

F1

Incremental Innovation

Development of Core

Business

F2

Transformational

Innovation

Hig

hN

ove

lty f

or

Ma

rke

t

Novelty for AXA Winterthur

F3

Disruptive

Innovation

Notes: [1] Target footprint of disruptive and managed archetypes in current IT landscape;

Examples: incremental and transformational innovation (F1&2)

15 IT Strategy | Sep. 2018

Operational excellence and productivity sustain our competitive advantage

Big Data and Trigger-based CRM

Qualification of sales leads for our agents –

cross, up-sell incl. churn prevention through

trigger-based information from external

platforms (Comparis)

Pro-active fraud detection in claims

handling processes through the analysis of

invoices from car repair shops

Fraud detection in worker compensations

Digitization and Automation @Claims

Self-services with real-time coverage

assessment and customer-specific assistance

services (e.g. brokerage of dehumidifiers on

building sites)

Successful automation of car claims

handling (marten damages incl. straight

through processing)

Further implementing automation roadmap

with dedicated product team (Business, IT,

Data Scientists, etc.)

Towards AXA CH high tech shop: AXA Sure example (F3)

16 IT Strategy | Sep. 2018

There is still a lot of work to be done…

17 IT Strategy | Sep. 2018

… but both researchers & practitioners awarded AXA CH for its transformation approach

Awarded 2nd time in consecutive year (silver price)

Standing out in transforming our culture and organizational structures

Customer-focused adaption of value delivery

Financial Performance

Dig

itiz

ati

on

Digital Champions

Organizational Maturity1 Digital Assets2 Digital Champion3

Accenture’s comments on our competitive position on the Swiss market “AXA is doing Digital right!”

Declared as digital champion in 2015

Strong recognized partnership between IT and business

AXA won 2 innovation awards in ’18[1] Flexcash as a connected insurance & ecosystem idea [2] AI solution for BI use cases w/ voice recognition

“AXA Sure” won gold in ‘17 @EFMA Accenture innovation award

Notes: [1] University St.Gallen Research (2017); [2] Efma Accenture Award 2017 & 2018; [3] Accenture Research (2015);

Innovation achievements and roadmap 2018ff.

18 IT Strategy | Sep. 2018

Focus on marketing/scaling most promising MVPs for AXA becoming a digital champion

Achievements 2017

Artificial intelligence & Machine

Learning: Glass damage chat bot

Blockchain: Digital car record PoC

Ecosystem: Pilot Rent n Share with

Swisscom & Joint Venture Tamedia

New product launch: FlexCash

Roadmap 2018ff.

2017

2018

Scaling MVPs @Health & Mobility

Systematically driving technology

trends

Implementing scaled open innovation

Towards

Digital

Champion

2020

What is in for our customers?

19 IT Strategy | Sep. 2018

Shorter time to market for new

(digital enabled) products to address

customer needs fast

Innovations are faster embedded in our

processes and products

Value orientation throughout the entire

organization, efficiency and customer

convenience

Customer needs will be at the heart

of our solution advancement due to

close business integration