AXA: We look to the future with confidence, despite the still turbulent financial environment

13 August 2012 — Daniela GHETU
henri_de_castries1Commenting the 1H2012 results, Henri de CASTRIES, Chairman and CEO of AXA, said: "AXA posted a solid set of earnings, illustrating the resilience of our underlying fundamentals in a challenging environment. We benefited from our significant exposure to Property & Casualty and Protection & Health, businesses which are less sensitive to financial markets". The Group's Underlying Earnings increased to EUR 2.3 billion, stable on a comparable basis, while the adjusted earnings remained stable, at EUR 2.4 billion . Due to non-repeat of exceptional gains on disposals in 2011, AXA's net income fall at EUR 2.6 billion, as compared to EUR 4.0 billion in 1H11.

AXA's total revenues were up 1% to EUR 48,4 million. Life & Savings revenues were up 1% to EUR 28,6 million, while on the Property & Casualty side a 4% growth in revenues was registered, to EUR 16,17 million, mainly driven by an overall positive price effect of 3%. For this segment, personal lines revenues grew 3% driven by a 3% average price increase. Commercial lines revenues grew 5% mainly driven by a 3% average price increase and higher volumes, in particular in high growth markets.

Speaking about the Life and Savings business results, Denis DUVERNE, AXA's Deputy CEO, commented: "84% of our sales are made in the mature markets and 16% in the emerging markets. Two years, ago, it was 10% for the emerging countries and 90% for the mature markets. The change in the geographic mix continues. For Southeast Asia, China and India, revenue growth was 18%. Revenue growth was particularly strong in Thailand, where sales of our protection product rose by 54%. Sales were flat in Hong Kong, reflecting dynamic growth in the protection business but no change in the sales of unit-linked products. Last but not least, we observed a 36% decline in business in Central Europe, attributable to a change in pension fund regulations in Poland that put a damper on inflows. We had to redeploy our sales forces into traditional life insurance products. We thus saw a decline in business that hurt our global emerging market growth for the first half of the year".

He also emphasized that Property & Casualty Insurance business rose by around 4%. Growth in revenues was virtually across the board, with the exception of direct insurance in the United Kingdom, where AXA began pruning the portfolio after a period of very rapid growth, and in the Spanish market, which is in the throes of an economic crisis: new car purchases are at a standstill and drivers are looking for less costly insurance coverage. In most of AXA's markets, property and casualty rates have continued to rise, and the Group's companies continued to attract many new personal lines. The overall increase was boosted by growth of 17% in the high-growth markets, including the emerging markets of CEE and CIS, and the increase in AXA Global Direct business (excluding the UK) of around 10%.

"We look to the future with confidence even though the risk environment remains turbulent. With each passing quarter and half-year, the AXA business model demonstrates its solidity and its adaptability to the environment", concluded Henri de CASTRIES the recent half year result presentation.

Download the full presentation of the 1H2012 results here!

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