Another day of interim results, and this time we hear from Paris-headquartered AXA.
Announcing its half-year figures this morning, AXA said it posted an 11% decline in net income. For the first six months of 2018, the insurance heavyweight reported net income of €2.8 billion.
“The increase in adjusted earnings was more than offset by the impairment of intangible assets linked to the transformation of our Swiss Group Life business (€-0.3 billion), as well as the negative impact from the change in the fair value of financial assets and derivatives, and exceptional charges linked to the IPO of AXA Equitable Holdings, Inc.,” explained AXA.
In terms of underlying earnings, however, the insurer was the bearer of good news as the figure saw a 9% rise from the same period in 2017. The firm said its €3.3 billion in underlying earnings reflected a strong operational performance across all geographies – boosting adjusted earnings also by 9% to €3.6 billion.
AXA UK & Ireland, for instance, enjoyed a 28% surge to £145 million in underlying earnings. Revenues, meanwhile, saw a 2% climb to £2.5 billion. Much of the gains were attributed to the strong showing from AXA UK & Ireland’s commercial and healthcare segments – commercial lines revenue jumped from £690 million to £730 million year on year; and the healthcare segment was up from £885 million to £908 million. Personal lines revenue did drop from £814 million to £797 million but overall COR improved to 97.2% (from H1 2017’s 98.4%).
“Our commercial business experienced growth in motor and property aided by a robust performance by our revamped schemes proposition – where we partner with brokers to help them find and grow new areas of business,” said Bertrand Poupart-Lafarge, CFO and Interim CEO, AXA UK and Ireland Group. “Our commercial direct SME business has also had a positive six months with the relaunch of our Business Guardian Angel service and our continued work on making insurance easier for micro SME customers.
“The personal lines market has been challenging in the first half of the year due to unfavourable weather coupled with the uncertainty surrounding the personal injury discount rate and consequent market contraction. However, AXA has one eye firmly on the future and our recent partnerships with Brolly, a digital personal insurance assistant, and By Miles, a new pay-as-you-drive telematics proposition are excellent examples of this.”
Commenting on the group results, chief executive Thomas Buberl said: “AXA delivered a very strong operating performance in the first half of 2018, with a 6% increase in underlying earnings per share, towards the top end of our Ambition 2020 target range. This result was supported by a strong increase in technical profitability across all our businesses.
“Our simplified operating model is bearing fruit. We have a strong growth dynamic across our geographies, especially in France and Europe, and in our preferred segments with protection new business volumes up 10% and health revenues up 7%.”
In addition, Buberl cited the ‘transformation’ happening at AXA.
“In the first half of 2018, we have taken major steps in our transformation journey through the successful listing of our US operations and our strategic decision to acquire the XL Group,” noted the CEO. “We also announced innovative partnerships with ING and Uber, the transformation of our Swiss Group Life business, and the planned disposal of AXA Life Europe (ALE).”
Yesterday it was revealed that AXA has received an irrevocable offer from Cinven for the potential sale of ALE, which is expected to generate total cash proceeds of €1.2 billion.