Axa boss Thomas Buberl is calling for an end to tax benefits for unhealthy diets. For Axa, he focuses on precautionary measures, growth through AI and business with small and medium-sized companies.
Thomas Buberl: “Europe was always strong when people had a common vision.” Photo: AFP
The AfD's election victory in Saxony-Anhalt is causing political turbulence in Germany. How do you perceive the result and the subsequent debate from the perspective of a German manager in France?
It was a shock at first. But afterwards we should not only criticize, but also ask ourselves: Why is this happening?
And?
Many people have the feeling that politicians are not working on the issues that are important to them. That should give us something to think about.
Many people are dissatisfied with the reform course.
I'm not so sure about that. Most people understand that many things no longer work in Germany. But you are increasingly asking yourself why so little is happening. Of course, it has become more difficult to organize majorities. This makes it all the more important to involve the population more closely.
What do you mean by that?
People need to become more part of the solution. France, for example, showed with the “Grand Débats” during the yellow vest crisis how citizen participation can work: the president went to the regions, spoke to the people and took up their ideas.
But little followed politically from this.
That was exactly the problem: If you collect a hundred suggestions, you then have to say which three you implement - or why none of them are convincing. Politicians are often told that they need to listen to people better. But listening alone is not enough. The impulses must then be translated into concrete policy. To actually improve people's situation.
Vita Thomas Buberl
Thomas Buberl has been at the helm of the French insurance group Axa since September 2016, for which he has worked since 2012. He previously worked for insurance companies in Switzerland. Buberl began his career as a consultant at the Boston Consulting Group. Born in the Rhineland, he studied economics in Koblenz and Lancaster, England. He earned his doctorate at the University of St. Gallen in Switzerland. He has been living in France with his family since 2016. In addition to German, Buberl also has French and Swiss citizenship.
Axa is the largest primary insurer in France and one of the largest insurance groups in the world. The group was created in 1996 through a merger with the insurer UAP; the Axa brand name has been around since 1985. The headquarters are in Paris. Axa employs around 156,000 employees and agents worldwide and has more than 92 million customers in 52 countries. Axa is valued at around 91 billion euros on the Paris stock exchange.
How would you describe the current situation in Germany?
Societies develop, reach a peak, lose touch and reinvent themselves again. Countries such as Spain, Portugal, Ireland and Greece seized this opportunity after the 2008 crisis. Germany and France have not yet experienced a crisis large enough to cause such disruption. But it will come. The German economy is in a decadent phase, that has to be stated clearly. The drivers of economic growth over the last 40 years have collapsed. But that's not the end of the story.
So things will get worse before they get better?
Exactly. But in the long term I am quite optimistic for Germany. What makes me particularly positive is the entrepreneurship of the younger generation. Many people want to build something themselves. While the established generation primarily wants to defend what exists and is characterized by uncertainty, the younger generation brings new energy.
The federal government wants to provide an impetus with massive investments...
Germany now has a unique opportunity to reinvent itself with these investments. But once the money is spent, it's gone. Therefore, it must be invested properly.
What are you thinking about?
Germany can now build up a defense industry that it hasn't had for a long time - for example, by using spare capacity in the automotive industry for the armaments industry. This can stimulate new high-tech industries, as we have seen in the USA. Politicians can definitely learn from companies here.
Actually?
When making investments, companies are focusing more on solutions that already work. In France, for example, there are hospitals that operate at a fraction of the cost because they are organized more entrepreneurially. You don't always have to reinvent the world. It is often enough to look in your own country, in your own region and copy solutions that already work elsewhere.
You cite France as an example of solutions that are already working. Why is it still so difficult for Germany and France to learn from each other?
German-French relations are currently friendly. People meet, discuss things, but live past each other. I would first sweep my own door. Companies could lead the way here: with cross-border internships, training programs or an investment fund for German-French companies. It is not enough to meet once a year at summits; business requires constant exchange.
That doesn't help much if Berlin and Paris don't get along.
Macron and Merz should analyze which topics both sides are interested in - that's what they should focus on. Instead of arguing about differences in energy policy, both countries should work together where their interests are in the same direction - in photovoltaics, wind energy or in space. After 20 years of debate about a European tank, it is also permissible to ask whether other technologies are now more important, such as drones.
You have just published a book about Europe. In it you plead for a more self-confident Europe. What is currently missing?
Europe must stop focusing only on what doesn't work. Europe was always strong when people had a common vision. For our parents, Europe meant: no more war. For us it meant traveling without a passport and studying elsewhere. Our children say: Europe is simply there. That is a success – but no longer an emotional vision. When we talk about Europe, we talk about the paralyzing bureaucracy from Brussels.
Which certainly has good reasons. What would be a way out of this situation?
We must abandon the idea that initiatives are always supported by all 27. If not everyone is willing to join an idea, that doesn't mean that it can't be implemented in smaller alliances. Poland, Spain and Italy are now important coalition partners on issues such as defense and securing raw materials. It is not about wanting to restore the old German-French axis on all issues. It is worth thinking about new coalitions on all issues.
Of course, that doesn't change the fact that many decisions in the EU have to be made unanimously, for example when we think about the Financial Markets Union. Now you are proposing a European investment fund, although there are already numerous initiatives. What's new about the idea?
Europe has a lot of capital, if we look at the assets of life insurers, for example. However, this money too rarely flows into European growth companies because it is fragmented into national funds, is subject to political restrictions, is invested in other countries or is tied up in government bonds. A European fund could pool state and private resources – around a third state and two thirds private capital – and be managed according to private criteria. It would have to be large enough to be able to handle individual investments of one billion euros. Then it would be about companies in later financing rounds whose risk is no longer fundamentally different than that of established corporations. We talk about the Capital Markets Union all the time. This is what it could look like in practice.
If you look at your own company: Axa is still valued lower on the stock market than Allianz and Zurich. How do you plan to close this gap?
We clearly have the goal of catching up with our competitors. We are leaders in profitability in most business areas. What we still lack is sufficient growth – both in terms of sales and earnings. That's exactly what we're working on now.
At Axa you have divested business areas and improved profitability in recent years. Now present your strategic plan for the next few years. What exactly are your growth plans? Do you want to buy?
With our new strategic plan we will accelerate our organic growth. Over the past ten years, we have simplified our business model, focused on our core insurance business and significantly increased customer satisfaction. This gives us a solid foundation to gain further market share and strengthen our competitiveness - without affecting our profitability. Artificial intelligence will play an important role in this.
To what extent?
AI can automate processes and reduce costs. But it also enables us to assess risks more quickly and accurately. When we insure a building, we don't just have to rely on our experience with this one property. We can evaluate data from thousands of comparable buildings and damage cases. This means we know more quickly what questions we need to ask and can better assess risks. AI also helps with prevention – for example in the case of climate risks, cyber attacks or health. For us it is therefore not just a tool for reducing costs. It improves our business and opens up new growth opportunities. We have prepared ten transformative AI initiatives that can be implemented in all countries. Each country decides for itself where to start.
What other initiatives do you have planned?
We want to retain our customers more strongly in the long term and offer them additional suitable insurance products through our sales channels. At the same time, we are expanding inclusive insurance to reach more people with low incomes and members of the middle class in emerging countries. We also want to transfer our direct insurance business to other countries. We also see growth potential in small and medium-sized companies, especially in the USA, as well as in new risks and technologies such as cyberattacks, autonomous driving and data centers. Demographic change is also increasing the need for savings, pension provision and health services.
They are also one of the major health insurance companies. Another major issue for German health insurers is the importance of prevention.
This is absolutely essential. And we are working on that too. Often it doesn't even take much. A blood test can provide a very clear picture of your health. If you compare the values over time, you can see how things are improving or deteriorating. What is crucial is that the insured are on board and see prevention as life-improving, not as control. Nobody can do anything about their genes.
The federal government wants to curb the consumption of sweet foods. What do you think of such initiatives?
If you are serious about prevention and health, you have to be serious from A to Z - and not just in individual areas. But I would start somewhere else first. I think it's wrong that on the one hand we want to create incentives for precautionary measures, but on the other hand we tax promote unhealthy eating.
Where does this happen?
The VAT reductions on food also apply to fast food, and EU subsidies for potato production flow into the production of fries. You can't preach prevention and subsidize fries at the same time.
You mean no more VAT relief for fast food?
That would be a start.
Should people who take precautions pay lower insurance premiums in the future?
Yes, tariffs must take people's behavior into account, but prevention must be an incentive. Nobody should be forced. And we must not abandon the principle of social balance. Insurance means that those who are a little more fortunate help ensure that those who are less fortunate can also live a good life. The insurer must not only concentrate on the best risks.
You have been running Axa for ten years. There will soon be a vacant position at Allianz in Munich, and your name keeps coming up. Would you be ready to move to Munich?
For me, Axa is like a family business. The ten years that I have been here have flown by. If I imagine what I would miss if I were no longer here tomorrow, it would be my colleagues and the work we do together. I have just extended my mandate here for four years. If something works well, you should keep it running well. I will not leave the Axa family.
