French insurance company AXA announced its interim results this morning in the Paris headquarters. AXA recorded a strong growth in earnings with a fourfold net income of EUR 4 billion. Business profitability increased with life and savings margins up from 21% to 26%, and with P&C current year combined ratio down 3.8 points to 99.2%.
Total revenues were down 3% to EUR 46,836 million.
Life and Savings revenues were down 7% to EUR 27,841 million, with New Business Volume down 1% to EUR 2,948 million, and New Business Value up 11% to EUR 771 million. As a result, new business margin increased from 21% in the same period last year to 26%. Net inflows amounted to EUR 3.6 billion against EUR 6 billion in the first half of 2010.
Property and casualty revenues increased by 3% to EUR 15,350 million. Personal lines revenues grew 4% largely driven by a 4% average price increase, and commercial lines revenues grew 1% with an average price increase of 2% partly offset by lower volumes with a continuing focus on selective underwriting.
Asset management revenues were up 3% to EUR 1,658 million mainly driven by higher performance fees and real estate transaction fees at AXA IM as well as higher distribution fees at AllianceBernstein. Average assets under management were stable at EUR 849 billion and net outflows amounted to EUR 23 billion; 24 billion net outflows at AllianceBernstein offset by positive net inflows of EUR 1 billion at AXA IM.
Underlying earnings were up 10% to EUR 2,222 million of which life and savings underlying earnings were down 1%. Adjusted earnings were up 7% to EUR 2,393 million, benefiting from higher underlying earnings.
Net income increased by 308% to EUR 3,999 million knowing that 2010 first half results included EUR 1,478 million exceptional loss related to the partial sale of the UK Life operations, and first half of 2011 benefited of 1,440 million realised by the sale of News Zealand and Australian operations.
So far this year, AXA shares are down 3.4%, outperforming the European insurance sector .SXIP, which has lost 8%.
AXA CEO Henri de Castries comments :
“AXA begins the second half of 2011 with a significantly increased exposure to high growth markets. This was achieved through both strong organic growth and active capital management, including the announced sale of Canadian operations, the sale of Australia and New Zealand operations and he acquisition if minority interests in Asia.
“Although the macro-economic environment remains uncertain, AXA clients can rely on the financial strength of the group and the strong quality and diversification of our business and invested assets.
“Our company-wide strategic plan, Ambition AXA, was launched this year and the first half results show that we are off to a good start in meeting our objectives. Going forward, we should continue to benefit from our selective approach in mature markets, our acceleration in high growth markets and the ongoing efficiency programs which have started to deliver.”