Axa Colonia Konzern Ag Business Information, Profile, and History
We offer a comprehensive line of coverage in all areas of personal and property insurance, focused on the needs of private, commercial and industrial clients. We promote a solid foundation for assets and the financial security of our clients by means of an extensive variety of financial services: construction financing, bond funds, real estate funds, and other financial instruments. Our strengths are the close relationship of our representatives to clients, the continuous work on new types of insurance and financial services and the development of innovative special products. Our staff is characterized by their competent counsel, their comprehensive understanding of customer service and their acknowledged reliability. We are aware of our responsibility for the life-planning, health care, and secure livelihood of our clients. We understand that our job as an insurance company is an ethical and social one as well. In our work we take into account the latest findings of science, technology and environmental studies. We observe in advance economic and social changes and do our business in harmony with environmental needs.
History of Axa Colonia Konzern Ag
AXA Colonia Konzern AG is Germany's fourth largest primary insurer based in Cologne. Through its operative subsidiary, Colonia Versicherung Aktiengesellschaft, the group provides a broad variety of personal and property insurance services such as general and professional liability, accident, fire, auto, transportation, life, and health coverage to private and corporate clients. Major brand names are Colonia, Nordstern, Darag, and Deutsche ärzteversicherung.
AXA Colonia is part of the world's largest insurance holding company, the AXA Group, which holds about 80 percent of AXA Colonia shares. As part of AXA, AXA Colonia offers international coverage concepts for multinational companies. The AXA Colonia group also offers several financial services including asset management, construction financing, bond funds, and real estate funds.
Early Years As Fire Insurer: 1839-1902
AXA Colonia's origins go back to a law enacted in 1837, banishing most foreign--mainly French--insurers from the German state of Prussia. This was the chance for the two brothers Abraham and Simon Oppenheim, of the Cologne-based Oppenheim bank, to pursue their plans for a fire insurance business in the form of a joint stock company within the thriving heart of the Rhineland. On June 22, 1839, five founders gave birth to Colonia by signing the company agreement after they had received a concession from the Prussian emperor Kaiser Wilhelm III: the Cologne bankers Simon Oppenheim, Heinrich Ziegler, Wilhelm Ludwig Deichmann, and Carl-Eduard Schnitzler, and Cologne's Chamber of Commerce President Peter Heinrich Merkens who became chair of the board. They were joined by other Cologne businessmen to constitute the first executive board of the Kölnische Feuer-Versicherungs-Gesellschaft (Fire Insurance Company of Cologne). The company's first fire insurance plan covered buildings and furniture consumed or damaged by fire and lightning. Documents, money, precious gemstones, and gunpowder mills, however, as well as fire resulting from earthquakes or acts of war, were not covered.
Johann Heinrich Daniel Kamp, an experienced banker and entrepreneur residing in Cologne, became the company's first director and took the first steps to get the business going, which meant to create a close network of representatives as soon as possible. By 1843, 59 general agencies in 57 towns, including more than 260 subsidiaries, represented the newly licensed firm. Because the name Kölnische Feuer-Versicherungs-Gesellschaft was not easy to remember by potential customers, the name "Colonia" was used instead, referring to the female allegorical figure that gave the city of Cologne its name. In 1841, the company's first brand name was approved by the Ministry for the Interior as a prefix to the company name.
Colonia's initial business concession allowed the company to do business in the German state of Prussia only. In the years after its founding, however, it modestly expanded into a few small German states as well as into The Netherlands and Denmark. A devastating fire in the German harbor town of Hamburg in 1842 was Colonia's first big challenge. Because of the company's high share capital basis, all claims--amounting to more than one-third of Colonia's annual premium income--were settled through cash payments within five weeks. Resulting from this experience, the board of directors decided to establish Colonia's own reinsurance company. After the first European economic crisis had delayed this project for several years, the Rückversicherungs-Aktien-Gesellschaft Colonia was set up under Colonia's third managing director, Jakob Gilbert, who served the company in this position between 1868 and 1883. Until the end of the 19th century, Colonia offered fire insurance only. In 1853, Concordia, Cölnische Lebensversicherungs-Gesellschaft, a life insurance provider, was opened and closely linked to Colonia through Abraham Oppenheim as a member of both companies' boards of directors.
New Products, Alliances, and Crises: 1903-45
Since its founding, Colonia had been a driving force in setting up alliances to promote the mutual interests of insurance companies. In the late 19th century, it joined five other insurance companies in founding the "Federation of German Private Fire Insurers," an organization that provided statistics linked with their business. While it was not a price cartel, minimum rates for fire insurance were set beginning around 1900. Between 1903 and 1917, Colonia added new insurance products to its business: a burglary and theft insurance; an insurance against loss of rent caused by fire, lightning, or explosion; a burst pipes insurance; a consequential loss insurance; a price difference insurance (i.e., for the sugar trade); and a marine insurance. By 1914, Colonia employed more than 70 people.
Beginning in 1919, Colonia entered two decades of new alliances through mergers and acquisitions to compete in the consolidating insurance sector. In December 1919, the company agreed to merge with the Kölnische Unfall-Versicherungs-Aktiengesellschaft (K.U.), another Cologne-based insurer active in the industrial liability as well as in individual accident, collective, passenger, sea voyage, and glass and valuables insurance, in which Colonia had been holding a substantial share since 1880. Colonia took over all of K.U.'s assets and insurance contracts--and its full name. The new Colonia Kölnische Feuer- und Kölnische Unfall-Versicherungs-Aktiengesellschaft, however, entered troubled times.
First of all, the merger went anything but smoothly. K.U.'s workforce could not get used to the more bureaucratic Colonia culture and none of the parties was willing to give up its independence. In addition, Germany's economy went through difficult times after World War I, including dwindling markets through lost territories and a collapse of the German currency due to inflation in 1920. Colonia, as a fire insurer, was not allowed by law to do business in foreign currency--a fact that put Colonia's reinsurance subsidiary, which had to pay back loans in foreign currency, into deep debt. Thanks to the brisk intervention of Colonia's supervisory board in the spring of 1923, the company was able to survive the turmoil. In October, Dr. Christian Oertel, a highly respected German insurance manager, was elected as chairman of Colonia's board. He successfully reorganized and streamlined management, sales, and administration, replaced bureaucracy by a more participatory culture to motivate Colonia's and former K.U.'s employees, increased Colonia's share capital, and rearranged its holdings.
In response to rapidly increasing competitive pressure, Colonia entered an agreement with the two other main insurance companies of the Rhineland to support each other if needed in 1921, sealed by a mutual exchange of shares. The agreement was hit hard in 1929, however, when one of the partners went bankrupt. In the years after 1924, Colonia bought holdings in several companies, many of which were sold again over the next ten years, when the company retained shares in ten companies, among them a 35 percent share in the Berlin-based Nordstern Allgemeine, and a 40 percent share in the Cologne-based reinsurer Kölnische Rückversicherungsgesellschaft. In 1938, the company was renamed Colonia Kölnische Versicherungs-AG. Before World War II began, Colonia was Germany's third largest private insurance company, with a workforce of about 880.
Postwar Boom and Major Mergers: 1946-72
In Colonia's first balance sheet after the war, the company's assets displayed were worth less than 60 percent of the prewar value. About a third of Colonia's buildings in the western part of Germany were destroyed. In the "Soviet Zone," Colonia's property was expropriated: ten branch offices and about 40 percent of the company's business volume were lost. Dr. Robert Pferdmenges, a close acquaintance of West Germany's new president, Konrad Adenauer, who had rescued the Oppenheim bank during the Nazi years and succeeded Simon Alfred von Oppenheim as a partner, led Colonia's reconstruction efforts as chair of the supervisory board. Colonia's chairman of the management board was Karl Haus, another representative of the Oppenheim bank in charge of its insurance holdings, who became the first president of the Association of German Insurers. While Colonia mainly focused on reconstruction in the early 1950s, the first signs of the postwar boom were seen when Colonia's traditional branches made profits again. Colonia's premium income increased by 15 percent from 1954 to 1955 to a total of DM 76.6 million. The company especially participated in the postwar boom of auto insurance, and new products such as livestock and textiles insurance were offered. Otto Vossen, an experienced insurance manager who had joined Colonia in 1946, took over chairmanship of the management board in 1963. An engineer with a creative mind, he pioneered Colonia's product management by introducing machinery, contract works, warranty, and building contractors' insurance for businesses, as well as an early version of renter's insurance and a new-value insurance for houses, among other offerings. A brand new office building in Cologne built in 1968 included a "drive-in station" for the fast settlement of claims. By 1969, Colonia's workforce reached 2,160, up from about 1,000 in 1953.
In 1967, Dr. Nikolaus Graf Strasoldo, former assistant of Dr. Robert Pferdmenges and successor of Karl Haus as a personally liable partner of the Oppenheim bank, became Colonia's chairman of the supervisory board himself. Together with Otto Vossen, he created a new corporate structure in one of the biggest merger deals in the history of Germany's insurance market. In a first major step, Colonia merged with the Lübeck-based National Versicherung, with which it was already closely connected through majority shareholdings of the Kölnische Verwaltungs-AG and the Oppenheim bank, as well as through a community of interests. All of National's assets and obligations were transferred to Colonia and the new company was renamed Colonia National Versicherungs-Aktiengesellschaft. In a second step, Colonia merged with two other major insurers, the Gladbacher Feuerversicherungs-Gesellschaft and the Schlesische Feuer, after it received major holdings in those companies from its "Rhineland Group" partner Aachener and Münchener in a share exchange transaction. Colonia also integrated the Westdeutsche Schlachtvieh-Versicherungsgesellschaft, a wholly owned subsidiary since 1959. Including those major deals, a total of 12 well established German insurers were merged with Colonia, making it one of the largest insurance companies in Germany with DM 685 million in premium income. Internally, Vossen and Strasoldo energetically pushed Colonia through a rapid restructuring program eliminating 24 of the former 30 executive board members of the merged companies after 1972. The 79 divisional offices of those companies were managed by Cologne headquarters while sales and claims settlement divisions were decentralized. At the end of the legal part of Colonia's major coup, it was given the new name Colonia Versicherung Aktiengesellschaft in 1971.
A New Leader and a New Identity: 1973-88
While legal matters were settled and Colonia's turnover tripled through the merger to about DM 3 billion, the new giant had to be merged internally--an even more challenging task. Dieter Wendelstadt, a 45-year-old dynamic leader and outsider, not at all familiar with the insurance business, was chosen by Graf Strasoldo as representative of Colonia's major shareholder, the Oppenheim bank, to accomplish that task. Strasoldo became chairman of the supervisory board and Wendelstadt took over as CEO. Soon after, he presented his fresh and unconventional concept for Colonia to increase service efficiency, expand internationally, and substantially improve internal communication among the different company divisions. To increase service quality, separate sales offices were established for corporate clients to better serve their special needs. To get closer to customers, new local offices were set up. To improve service quality, a new training center was opened in 1976. Claas Kleybold, Colonia's new marketing and sales executive, concentrated on the reorganization of the sales channels and the introduction of a comprehensive electronic data processing system. By 1979, Colonia's service network was one of the largest in Germany's insurance landscape, including 80 local offices, 1,700 full-time agents, and 13,000 part-time agents.
Colonia's decision to expand internationally was driven mainly by the ongoing internationalization of its corporate clients. To provide insurance services for its subsidiaries abroad, but also to further distribute Colonia's own risks, the company started working with experienced local partners through minority holdings. Colonia's first foreign subsidiary--Colonia Insurance Company (UK) Ltd.--was established in London in 1975. One year later, Colonia was the first German insurer to receive a license for conducting business in the United States, namely in New York. In the following years, Colonia gradually expanded into most of the other states as well as in Europe, Canada, Brazil, and Saudi Arabia.
After the big merger Colonia's headquarters were spread over 13 different locations in Cologne, making internal communication quite complicated. A symbol of the new concept of "live communication" (open and participatory management style), a DM 250 million office complex was erected for Colonia employees in December 1983. At the end of the 1980s, Colonia was one of Germany's leading insurance groups, including its main subsidiaries, Colonia Lebensversicherung AG (life insurance), Colonia Krankenversicherung AG (health insurance), the Colonia Bausparkasse (construction financing), and its majority shareholdings Nordstern Allgemeine Versicherungs-AG, Kölnische Rückversicherungsgesellschaft (reinsurance), and Rheinisch-Westfälische Boden-Credit-Bank (real estate financing). Private policies, auto and life insurance in particular, contributed about one-third of Colonia's premium income, and fire insurance and industrial liability insurance were its most important products for businesses. Some 1,300 independent agents exclusively offering Colonia policies were supported by 85 local sales offices, 16 divisional and branch offices, traveling salespeople, part-time agents, and brokers.
International Expansion with New Partners: 1989-99
Between 1989 and 1991, major changes in the marketplace as well as from the side of its shareholders forced Colonia to adapt quickly. In its 150th anniversary year, Colonia's quiet financial backer, the Oppenheim bank, sold its majority share to the second biggest private French insurance firm, Compagnie Financiere du Groupe Victoire. Together with two other Victoire subsidiaries, the Danish Baltica and the Dutch Nieuw Rotterdam, Colonia belonged to the newly created Vinci B.V. headquartered in Utrecht, The Netherlands, which ranked fifth in Europe's insurance market with about DM 19 billion.
After the two German countries were reunited, Colonia expanded into the new East German market. The first branch office was opened in Dresden in 1990 and expanded to a network of 19 branch offices, 180 sales managers, and 12 general agents by the mid-1990s. In 1990 Colonia acquired a 40 percent share in DARAG, the reinsurer for East German firms involved in international trade, refocusing the business toward insuring operational risks for large and middle-sized clients. New offices were also opened in Poland and Hungary.
A new group structure became effective in 1991. The Colonia Versicherung AG transferred its business to its wholly owned subsidiary Wikinger Lloyd Versicherungs-AG, Köln, which was renamed Colonia Versicherung AG and took over operations. The "old" Colonia Versicherung AG became the new Colonia Konzern AG and functioned as a management holding company for the whole group. Claas Kleybold succeeded Dieter Wendelstadt, the man who had freed the marketing and sales position on the management board for Kleybold in 1973, as CEO in 1991. A passionate art collector, Kleybold later developed a Colonia specialty--art insurance.
The first consolidated result of the new Colonia group was a gross premium income of DM 7.6 billion. In 1994, the abbreviation CKAG was added to Colonia's name. In the same year, the U.S. firm General Re, the world's fourth largest reinsurance firm, acquired a majority share in Colonia's reinsurance subsidiary Cologne Re in a $630 million deal, creating the world's third largest reinsurance company and strengthening Cologne Re's capital backup. In 1996, premium income of the Colonia group amounted to DM 10.8 billion, the third largest among Germany's insurers. After several changes of majority shareholders in the mid-1990s, the French Compagnie Union des Assurances de Paris (UAP) finally became Colonia's parent company in 1996 and then merged with the French AXA SA--with DM 100 billion in world sales and DM 770 billion of managed assets--in a $9 billion deal in 1997. The AXA group now held about 69 percent of Colonia's equity capital and, consequently, CKAG Colonia Konzern AG became AXA Colonia Konzern AG in 1997. As a part of one of the world's leading insurance groups, Colonia was enabled to offer its business clients comprehensive international coverage. In 1997, AXA's net profit was DM 260 million, a 10 percent growth over 1996 profits.
In 1998, the AXA Colonia group founded AXA Colonia KAG and AXA Colonia Asset Management GmbH, two asset management subsidiaries with assets worth DM 35 billion, and launched a 24-hour-customer service center with about 100 employees. One of Colonia's major cases in that year was the tragic accident of the International City Express train near the German town of Eschede in June 1998. With total premium income slightly lower than in 1997, AXA Colonia predicted total sales of about 10.4 billion and an 8 percent decrease of its workforce down to about 8,580 for 1998. In early 1999, AXA Colonia was working on new products, such as private pension funds combined with life insurance, and planning to merge the Nordstern companies with AXA Colonia. It also was planning to take over the Hamburg-based competitor Albingia for DM 1.66 billion, depending on the approval of Albingia's British parent company Guardian Royal Exchange Plc. Albingia, the world market leader for insuring sports events with a mass audience, generated a premium income of approximately DM 2 billion in 1997. AXA Colonia also announced that Dieter Wendelstadt would retire after the annual meeting in 1999 while Claas Kleybold would resign as CEO and succeed retiring Dieter Wendelstadt as chairman of AXA Colonia's supervisory board.
Insuring the 21st Century
The beginning of the 21st century proved a challenging period for the big European insurance companies, and AXA Colonia was no exception. A significant decline in revenues in the industrial insurance sector, which forced Colonia to take an underwriting loss of $192 million in its commercial businesses in 2000, forced the company to increase prices for corporate insurance by approximately 60 percent, while simultaneously cutting back on the range of coverage offered. At the same time, the company was compelled to transfer its multinational industrial insurance holdings to AXA Corporate Solutions in Paris, the international business insurance branch of its parent company, the AXA Group. Under the terms of the reorganization, AXA Colonia retained control over businesses in Germany, Switzerland, Scandinavia, and Austria.
This period also saw a shift in Colonia's overall business strategy. While the company's emphasis had traditionally been placed on its accident and damage insurance segments, which accounted for more than 50 percent of Colonia's total business in 2000, it was becoming increasingly clear that the profit margins afforded by these products were small relative to the more lucrative life and health insurance sectors. Toward this end, the company set itself the goal of increasing the overall premium income afforded by its life and health products, to account for 66 percent of its total business by 2005. An even more dramatic development came in the spring of 2001, when Colonia entered into preliminary talks with Deutsche Bank AG over the possibility of forging a "bancassurance" partnership. Bancassurance, the practice of using the traditional banking branch system as a distribution channel for insurance products, had become common in a number of European countries in the 1990s, but had yet to establish a firm foothold in Germany. The takeover of Dresdner Bank by Colonia rival Allianz AG, however, which resulted in the implementation of a bancassurance program, prompted the company to explore bancassurance as a viable means of expanding its business. Although Colonia's ambitions fell shy of an acquisition of Deutsche Bank, it did seek to join forces with Deutsche Herold, the insurance division of the banking giant. In addition to creating a range of new avenues for the sale of the company's products, as well as increasing the scope of its marketing efforts, the proposed venture would allow Colonia to begin selling the insurance offerings of other companies, a practice that was becoming prevalent in the highly competitive German insurance market. In light of the fact that Deutsche Herold ranked fourth among German insurers, while Colonia ranked sixth, the proposed merger had the potential to help the combined company compete with industry leaders Allianz, AMB, and Ergo.
During this time, Colonia also began exploring the possibility of expanding its product line. One sector that seemed to offer enormous potential was art insurance. In September 1999 the company's AXA Nordstern Art Versicherung AG division established AXA Nordstern Art, with the aim of offering both private and corporate art insurance products worldwide, with an emphasis on the Canadian and Asian markets. The company also shored up its presence in the Eastern European mortgage market, most notably in Hungary, where it launched a network of franchise agencies in July 2000. Amidst this flurry of activity, by the end of 2000 AXA Colonia was able to boast its ninth consecutive year of increased profits and could likely look forward to an even more substantial increase in its business in the near future.
Principal Subsidiaries: AXA Versicherung AG (99.8%); AXA Lebensversicherung AG (99.1%); AXA Krankenversicherung AG; Deutsche Ärzteversicherung (97.9%); AXA Art Versicherung AG; AXA Bank AG; AXA Bausparkasse AG; "die Alternative" Versicherungs-AG; DARAG Deutsche Versicherungs- und Rückversicherungs-AG; AXA Konzern AG, Vienna; Roland Rechtsschutz-Versicherungs-AG (39.9%); General Re-CKAG Reinsurance and Investment S.a.r.l. (Luxembourg; 49.9%).
Principal Competitors: Allianz AG; ING Groep N.V. (Netherlands); Zurich Financial Services (Switzerland).
- Key Dates:
- 1839: Kölnische Feuer-Versicherungs-Gesellschaft is incorporated.
- 1919: Colonia merges with Kölnische Unfall-Versicherungs-Aktiengesellschaft.
- 1923: Dr. Christian Oertel is named chairman of the board of Colonia.
- 1975: Colonia Insurance Company (UK) Ltd. is formed.
- 1990: Colonia opens a branch office in Dresden.
- 1991: Colonia is restructured under the name Colonia Konzern AG.
- 1996: Compagnie Union des Assurances de Paris (UAP) becomes the parent company of Colonia.
- 1997: Compagnie Union des Assurances de Paris (UAP) merges with AXA SA; CKAG Colonia Konzern AG becomes AXA Colonia Konzern AG.
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