Lower revenues in the first half were driven by (i) Life & Savings (-8%) mostly from lower sales in G/A Savings in France and in Europe, largely impacted by Covid-19 in the second quarter, and (ii) Property & Casualty (-1%), reflecting a decrease in Personal lines (-2%) primarily due to lower new business activity during the lockdown periods across most geographies and stable Commercial lines, with strong price increases, notably at AXA XL, offset by lower volumes in the context of Covid-19, partly offset by (iii) Health (+9%) with growth across all geographies, and (iv) Asset management (+3%) linked to higher average assets under management.
AXA re-affirms its current best estimate for the impact on 2020 underlying earnings for the Group from Covid-19 related P&C claims and solidarity measures at EUR 1.5 billion (post-tax and net of reinsurance), consistent with the Group's June 3rd, 2020 announcement. This impact has been reflected in the underlying earnings of 1H2020.
- Gross revenues: EUR 52,391 million (-10%), of which:
- France: EUR 12,552 million (-6%)
- Switzerland: EUR 4,263 million (-13%)
- Germany: EUR 6,094 million (+2%)
- Belgium: EUR 1,765 million (-2%)
- UK & Ireland: EUR 2,794 million (-2%)
- Spain: EUR 1,366 million (+0%)
- Italy: EUR 2,507 million (-16%)
- AXA XL: EUR 10,522 million (+1%)
- Asia: EUR 5,522 million (+14%)
- International: EUR 3,563 million (-3%)
- Transversal: EUR 1,444 million (-3%)
- P&C combined ratio: 101.7% (+6.5 pp.)
- Solvency 2 ratio: 180% (-18 pp. vs. FY2019)
- Average assets under management: EUR 717 million (+10%)
- Underlying earning: EUR 1,885 million (-48%)
- Net income: EUR 1,429 million (-39%)
Adjusted earnings were down 51% to EUR 2.0 billion, reflecting lower underlying earnings, as well as higher impairments in the context of financial market volatility linked to Covid-19.
Shareholders' equity was at EUR 70.1 billion, up EUR 0.2 billion versus December 31, 2019, mainly driven by the positive impacts of the net income contribution and the change in net unrealized capital gains, partly offset by the EUR 0.73 dividend per share approved by shareholders at AXA's Annual General Meeting on June 30, 2020 and paid to shareholders on July 9, 2020.
Debt gearing was at 27.6%, down 1.2 points versus December 31, 2019, mainly reflecting the positive impact of EUR 1.3 billion subordinated debt repayment. Cash remittance to AXA S.A. from its operating entities in the first six months of 2020 was EUR 4.9 billion. Adjusted return on equity was down 9.6 points to 8.8% versus 1H2019, driven by the decrease in adjusted earnings
Solvency II ratio was 180% at June 30, 2020, down 18 points versus December 31, 2019, mainly driven by (i) unfavorable financial market conditions (-20 points), primarily from lower interest rates and higher corporate spreads, (ii) a positive operating return (net of Covid-19 impacts) of +6 points, offset by the accrued dividend for 1H2020 (-6 points), (iii) the repayment of subordinated debt (-4 points), and (iv) the release of the provision for the 4Q2020 exceptional distribution of reserves (+6 points).
Net income decreased by 39% to EUR 1.4 billion, as the decrease in adjusted earnings and the negative marked to market impact of invested assets were partly offset by a favorable impact from the change in the fair value of derivatives, and the non-repeat of the negative impact from the deconsolidation of EQH.
"The Covid-19 pandemic has shown the critical role of insurance in protecting societies and supporting economic recovery. This conviction is encapsulated in our new purpose 'Acting for human progress by protecting what matters'. As a global insurance leader and investor, the Group continues to take ambitious measures to meet the major challenges of our time, aligning post-Covid recovery strategies with our long-standing commitment to facilitate the green economy transition. Our people are key to the Group's performance, and I wish to thank all our employees, agents and partners, for their unwavering commitment to provide support and undisrupted service to our clients during these challenging times."