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AXA is selling annuities through ATMs in China

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Shanghai is the Silicon Valley of Asia. That’s what AXA executives stressed recently.

I was in China’s most populous city just last month, attending the annual AXA Global Media Summit. As part of the event, we were taken on a guided tour of a branch of ICBC, the largest bank in the world. And you wouldn’t believe what I saw.

Within the spacious, sun-filled lobby there are several ATM-like machines where customers of the bank can, of course, take out money and make deposits. But what’s ingenious and innovative is they can also purchase a life insurance policy or an annuity — all within just a few minutes time, with no human interaction and no overly-complicated jargon.

But no one’s really buying these things through an ATM, right? Wrong. Chinese consumers are loving it. Asia represents 17 percent of the overall growth in AXA’s life division.

I guess that’s exactly how AXA predicted it would happen when the insurance giant joined forces with ICBC in mid-2012. Now, AXA is selling its insurance and retirement products to ICBC clients in the most populated country in the world with a society that, some might argue, is most in need of financial planning and retirement preparation. AXA’s lofty goal: reach 100 million customers by 2030. And I think they’re taking risks in all the right places to do just that.

Let’s look at the numbers: Asia, with the exception of Japan, has one of the highest savings rates of anywhere in the world (estimated at 42 percent). Add to that a significant protection gap and a growing demand for asset protection and you have an area in dire need of life insurance and retirement products.

Asia as a whole will have 4.9 billion people by 2030, with GDP growing three times by that year, to $38 trillion. It’s an opportunity to say the least.

“Yeah, we look at what our competitors are doing, but we are not counting on that to teach us much,” said AXA CEO Henri De Castries during the event. “It’s an elephant looking at another elephant. What is much more interesting is asking, ‘Where are the value propositions that could fundamentally disrupt what we do?’”

Sure, what works in Asia doesn’t always work in the U.S. and vice versa, but we must continue searching for value propositions and potential disruptors.