Risk represents the AXA Group's raw material. The insurance business involves taking on our customers' risks and "converting" them. There are different ways of doing this. The Group can take on the risks itself by diversifying them, which means pooling them together with other risks, or it can transfer them to outside organizations such as reinsurers or financial markets through a securitization approach.
Risk management, which applies to all of the Group's areas of activity - life, property and casualty, asset management - consists of managing these conversion processes. As such, risk management is about understanding and measuring risks more effectively in order to manage them in a controlled, responsible and profitable way over the long term, with a deliberate focus on sustainability, while facilitating this risk-taking.
In addition to this process, certain businesses which pose particularly sensitive environmental, social or ethical risks require an extra level of analysis.
When appropriate or relevant, the Group's underwriters and portfolio managers integrate a number of emerging environmental and social risks, including human rights concerns, as well as more generally ethical concerns in their product development processes and policies. This is notably undertaken via the following initiatives:
Emerging risks are screened by a specific team within AXA's Group Risk Management structure. These risks and AXA's response is detailed in the "Risk Factors" section of the Group's Annual Report.
In June 2013, AXA published its first PSI report, illustrating how the ESG criteria are being integrated into AXA's operational and business processes.