AXA Group has disclosed that its affiliate, AXA France Vie, has finalized a reinsurance agreement with AXA Réassurance Vie France (ARVF). ARVF is a reinsurance entity jointly owned by AXA Assurances Vie Mutuelle and AXA Assurances IARD Mutuelle.
Under this agreement, ARVF will assume reinsurance for approximately €12 billion of AXA France Vie’s savings reserves. This includes €10 billion allocated to traditional general account (G/A) savings.
The deal is projected to facilitate a cash transfer of €0.6 billion to AXA S.A. and is expected to enhance the AXA Group’s Solvency II ratio by approximately two points as of December 31, 2023. However, the transaction might lead to a decrease in underlying earnings by about €50 million annually starting from 2024.
In response to the anticipated earnings reduction, AXA plans to initiate a share buyback program, estimated at around €0.5 billion. This buyback is scheduled to commence following the publication of the group’s full-year results for 2023 and its new strategic plan.
The transaction is also anticipated to have a negligible one-time effect on AXA Group’s net income. Additionally, it is expected to result in a decrease of roughly €0.4 billion in AXA Group’s net contractual service margin from 2024 onwards.
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