De Castries says lower costs and better service are the market's challenges
AXA chief executive Henri de Castries urged the insurance industry to improve service and cut expenses if it was to meet the challenges of the future.
Speaking at the CII conference in Birmingham, de Castries said the tough economic conditions experienced by the industry over the past ten years would make it leaner and more professional.
He said: "If you do not decrease your costs you will not preserve your market share. This is true in insurance just as it is true in any other industry."
On service, he added: "If you pay a lower price you will get a poorer service. This is bad for customers and it is bad for the industry."
De Castries went on to say that stricter capital requirements, lower investment returns and increasing consumer expectations could have a very positive effect on the industry.
He said this would lead to increased professionalism and greater recognition for excellence. He accepted the rising importance of banks in the insurance sector, but denied this would squeeze out intermediaries.
He said: "Traditional distribution channels have a very big future provided they transform with the market."
De Castries said that the key to future growth in the market lies in providing strong advice and having an intimacy and knowledge of the customers' lifestyle and requirements, which enables insurance packages to be tailored to precisely fit their needs.
De Castries closed by urging delegates to look to five main drivers for the future: product innovation, technical management, distribution management, quality of service and productivity.
