Major insurer says cat costs holding back profits

Major insurer says cat costs holding back profits

Major insurer says cat costs holding back profits This week, several major insurers are announcing their results for the first half of 2016 with the impact of Brexit, Flood Re legislation and catastrophe costs appearing to take their toll across the board.

Now, it is the turn of AXA – one of the largest insurers in the world – to report its earnings and the results are once again a mixed bag.

The company has been able to report a 4% rise in net profit for the period thanks largely to boosts from real estate proceeds. However, it was held back by lower asset management revenue and natural catastrophe costs.

Overall, net income rose for the period to 3.2 billion euros, up from 2.6 billion euros – but this was still short of many analysts’ expectations with total group revenue slipping by 0.5% to 54 billion euros. Its gains in areas such as property and casualty were offset by declines in asset management and its life and savings business.

In a statement announcing the results, incoming chief executive Thomas Buberl highlighted that the group is increasing its focus on underwriting margins, digital business, efficiency and selective growth that does not tie up large amounts of capital.

“We have delivered resilient underlying earnings... despite market headwinds and a higher cost of natural events,” he said, highlighting that interest rates had fallen since Britain's vote to leave the European Union in June.

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