AXA & Western Union Partnership: Affordable Insurance through Money TransfersAXA is launching a global collaboration with The Western Union Company to provide affordable insurance to Western Union’s customers. ALL ARTICLES | Commitment
In 2016 AXA launched AXA Emerging Customers, a global initiative to provide adapted solutions to excluded or underserved populations. We spoke to Garance Wattez-Richard, Head of AXA Emerging Customers, to find out how the new partnership with Western Union protecting senders of remittances will contribute to the financial inclusion of the middle class of tomorrow.
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Can you tell us what drove this partnership between Western Union and AXA?
Garance Wattez-Richard: It is a partnership between companies sharing a vision and values. For AXA, reaching customers who have been underserved by insurance is a business priority, with migrant workers being one of our strategic segments. We conducted deep consumer insights work to understand their protection needs and those of their families, which led us to launch some schemes in Malaysia and Thailand. This global partnership with the worldwide leader in money transfers takes our efforts to the next level, bringing new solutions to millions of migrant workers and their families.
On the Western Union side, the drive is to leverage the incredible trust created with their customers to evolve beyond money transfers and build a broader ecosystem of relevant products and services.
The time is right for such a partnership for two reasons. On the one hand the number of migrant workers worldwide has never been so high – it increased by 28 per cent between 2006 and 2017 – and digital technology is creating the potential to deliver new services seamlessly and affordably to these customers. On the other, the Covid crisis has demonstrated how critical it is to extend insurance safety nets to those who need them the most.
Tell us more about how customers will benefit from this partnership
Garance Wattez-Richard : people working abroad face significant levels of uncertainty, often occupying riskier and unstable jobs. The World Bank’s June 2020 estimate shows a possible decline of 23% in international remittances overseas because of the COVID-19 (coronavirus) pandemic***. The loss of these people’s earning capabilities can have highly damaging consequences for their families for whom remittances represent on average 60% of their total income****. This high dependency, coupled with low rates of insurance penetration in emerging markets, means recipients of remittances are more exposed to shocks if the sender loses earning capability.
By linking insurance to money transfer services, AXA and Western Union offer new solutions to cover these risks for millions of migrant workers and their families at home. To start the collaboration, an initial pilot, called ‘Transfer Protect’, has been launched in France with AXA Partners and offers Western Union’s digital customers the option to sign up for life and disability insurance seamlessly when they transfer money. This will provide senders of remittances peace of mind knowing that their designated family member or loved one will receive a payment corresponding to several months of remittances in case risks materialize.
What’s next beyond this first ‘Transfer Protect’ pilot?
Garance Wattez-Richard: Our goal is to build the insurance culture of customers who in most cases have never purchased coverage before. This will require that Western Union and AXA make our value proposition as tangible and our processes as seamless as possible in the context of a recently overhauled regulatory framework in Europe. This explains why we are starting with a very simple life and disability insurance as a pilot.
Beyond this first step, our goal will be to develop other products and services to meet the holistic protection needs of WU customers. As an illustration, our joint research demonstrated that telemedicine and repatriation services are an important need especially for the African diaspora living in Europe. By educating senders of remittances on insurance, we also aim to leverage the fact that they are trusted influencers for their families at home, whom we aim to insure as a second step through AXA’s entities in the receiving markets. Going forward, AXA’s presence on both sides of the largest remittance corridors will therefore be a key asset to scale such solutions worldwide with Western Union.