Organizational Restructuring at AXA: Adopting (and Dropping) a New Business Model

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"We do not want to be ranked as a reinsurer or as a corporate insurer. We want to be regarded as a service provider." ¹

- Jean-Marie Nessi, CEO, Axa Re, in February 2000.

"We do not want to be a big reinsurance company, we want to be a great reinsurance company." ²

- Philippe Donnet, CEO, Axa Re, in October 2002.

An Air of Uncertainty

In January 2002, Jean-Marie Nessie (Nessie), CEO of Axa Corporate Solutions, a key division of the world's second-largest life/health insurance company (as per 2002 statistics), Axa, left the organization.

Axa Corporate Solutions was created less than two years earlier, after a radical organizational restructuring of Axa. Nessie had worked with the France-based insurance giant for over 22 years and was widely believed to be an integral part of the company's top management.

Reportedly, he had played a pivotal role in the organizational restructuring exercise. Besides helping in conceptualizing the new business structure, he had personally worked out most of the modalities of the exercise. At that point in time, Axa had portrayed Nessie as a revolutionary leader who would help the group meet the challenges of the rapidly-evolving global insurance industry.

His abrupt, low-key departure naturally attracted the attention of the industry observers.

Interestingly, Axa did not explicitly state that Nessie was leaving the company; the media was left to infer it from a press release on the company's website, stating that Philippe Donnet (Donnet, an Axa Executive Committee Member) had been made CEO of Axa Corporate Solutions.

However, those keeping a track of the performance of Axa Corporate Solutions since its formation were not very surprised at this turn of events. While some analysts believed that Nessie had failed to live up to the group's expectations from him, others claimed that the he had become a casualty of Axa's experimental organizational restructuring that began in the late-1990s.

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1] 'The Man with the Plan,' Reactions, February 2000. Refer Exhibit I for a brief overview of the insurance/reinsurance industry and the major product variants.

2] 'Back in the Race,' Reactions, October 2002.