AXA’s worst results in the UK

AXA reported total revenues down 3% to €90.1bn with total property and casualty revenues steady at €26,176m (€26,039m) but on a combined ratio that rose from 95.5% to 99% in 2009.

Total revenue in the UK fell from €3,549m to €2,783m, with P&C revenues in the UK and Ireland falling from €4,420m in 2008 to €3,905m in 2009. The combined ratio rose from 99% to the underwriting loss making 102.2%. In the UK AXA made a net loss of €33m after last year's €257m profit.

P&C IFRS revenues by country/region (2008 in brackets)

• NORCEE €7,907 (€7,793m)
• of which Germany €3,501m (€3,530m)
• of which Belgium €2,130m (€2,139m)
• of which Switzerland €2,154m (€2,017m)
• MedLA €6,697m (€6,414m)
• France €5,684m (€5,595m)
• United Kingdom & Ireland €3,905m (€4,420m)
• Canada €1,167m (€1,070m)
• Asia €813m (€748m)
• Total P&C revenues €26,174m (€26,039m)

P&C Combined ratio by country/region (2008 in brackets)

• NORCEE 97.8 (97.2)
• of which Belgium 99.8 (98.8)
• of which Switzerland 94.0 (93.6)
• of which Germany 98.7 (98.2)
• France 99.1 (93.0)
• MedLA 99.0 (93.3)
• UK & Ireland 102.2 (99.0)
• Rest of the world 96.6 (95.2)
• Total P&C 99.0 (95.5)

Personal Motor revenues (35% of total P&C revenues) were up 2.0% mainly driven by the UK (success of Swiftcover direct platform), Canada (volumes and tariff increase) and France (volumes and tariff increase).

This was partly offset by Spain (drop in car sales and strong competition) and Germany (competitive pressure).

Motor net new contracts amounted to 989,000. Personal Non-Motor revenues (26% of total P&C revenues) increased by 1.7% with overall positive price effect across the board, partly offset by the UK.

Household net new contracts amounted to 146,000.

Commercial Motor revenues (7% of total P&C revenues) were down 1.2% with negative contributions mainly in the UK, Spain and France.

Commercial non-Motor revenues (31% of total P&C revenues) were down 1.7%, driven by the UK (selective underwriting and strong competition) and Spain (notably Liability and Construction).

Financial crisis

Henri de Castries, chairman of AXA’s management board said: “In what has been the most severe financial crisis in recent decades, AXA has demonstrated its capacity to deliver results by remaining focused on its core business: insurance and asset management.

AXA's commitment is to stand by its clients with financial protection and savings solutions.

“2009 results confirm the strength of our business model, illustrated by the return of our solvency to pre-crisis levels and the strong rebound in our net income. Based on this solid performance, AXA’s Management Board will propose to shareholders a 38% increase in dividend.

Uncertainties

“In spite of uncertainties around the macro-economic context and taking into account the evolution of the regulatory framework, AXA should benefit from favourable trends in the insurance and asset management markets, its leading brand, innovative products and improving quality of service.

“The growth of the group will be supported by the continued increase in exposure to emerging markets and the synergies generated by the new life and property & casualty global organisation.

“Our 2010 priorities will also focus on optimising margins in all business lines, through improvement of business mix in life, combined ratio in property & casualty, and net inflows in asset management.”

Distribution

Bluefin Advisory Services reported a fall in overall revenues by 25% to £70m in 2009, reflecting the strategic decision to dispose of the network businesses and to deliberately refocus towards fee based financial advice in readiness for RDR. "Offsetting some of this decline was revenue growth in corporate consulting up 6% in difficult trading conditions," said AXA.

Bluefin Insurance Group posted a decline in revenues, down 9% to £116m in 2009. "While all business sectors have been adversely affected by the market those most impacted include the property and SME sectors. Despite the market conditions Bluefin Insurance has secured good overall levels of new business and customer retention rates – at 90%."