AXA grows UK business amid increased P&C focus

AXA UK & Ireland earned revenues of €2.86bn (£2.6bn) in the first half of 2019 - an increase of 3%; with all property and casualty lines seeing a positive increase.

Property and casualty lines were up by 4% at €1.82bn (£1.66bn). Personal motor saw an increase of 5% at €652m (£594m), and commercial motor was also up 5% at €381m (£347m).

Overall personal lines net new contracts amounted to €228,000 which was mainly driven by Europe at €132,000. This was due to “strong new business” in motor notably in the UK and Ireland as well as in Italy.

Antimo Perretta chief executive at AXA Europe said that, AXA delivered a “strong performance” in the first half of 2019 in Europe with a further improvement in technical profitability with continued disciplined growth.

“We also made significant progress in our business transformation with a clear focus on redesigning our customer journeys end-to-end and introducing new innovative customer solutions in SME and health,” he added.

Group focus

As a group, AXA’s underlying earnings were up 7% at €3.6bn in its half-year results for 2019, this was followed by its revenue being 4% up at €58bn.

It comes at a time when AXA’s chief executive Thomas Buberl said he is trying rebuild the firm by pivoting to property and casualty (P&C) insurance. He said the firm is “on track” to deliver its transformation.

The UK growth in P&C came as life and savings revenues dropped by 7% to €26m.

It is a move that some of AXA’s shareholders were somewhat skeptical about, however the firm’s underlying earnings per share were up by 10% to €1.46.

Total revenue was up by 4% from €53.6bn in the same half last year to €57.9bn.

Organic growth momentum

In an official video interview for AXA Buberl on the firm’s results, said that the firm had strengthened delivering a “strong operating performance”.

He said: “The momentum of organic growth has continued. Our revenues increased by 4% to €58bn. This was driven by our priority segments: P&C commercial lines +6%, health +5% and protection +3%. This growth has been very profitable.”

Fruits of our strategy

Speaking of AXA’s underlying earnings, he added: “This strong figure was driven by our key markets notably Europe and Asia. It also reflects the very good quarter of our new entity, AXA XL which generated €502m in earnings. These results are the fruits of our strategy, which is to focus on segments with future growth and promising geographies.”

The “new AXA” he said will derive 82% of its underlying earnings from health, protection and P&C –which was only 66% two years ago.

Double dynamic

He said that the firm’s earnings benefitted from a “virtuous double dynamic” – both growing volumes and improving profitability for the insurer across the globe and in its “preferred segments”.

“AXA is very well advanced on its transformation journey. The group has reduced its sensitivity to financial markets, created the #1 [number one] global P&C commercial lines insurance platform and strengthened its position as a world leader in health insurance.

“I would like to thank all our colleagues and partners for their critical role in the execution of our transformation, as well as our clients for their continued trust,” he added.

Boost

But it was AXA XL which boosted the firm’s results -the insurer acquired AXA XL for €15bn last year.

AXA’s adjusted earnings were up 10% at €4bn and raised by €502m contributed by AXA XL.

Buberl explained: “AXA XL had a great first half with continued and disciplined growth in revenues and a solid contribution to the Group’s earnings. Synergies are materializing well, and AXA XL should benefit from the increasingly positive pricing context.”

He said that the integration of AXA XL is “progressing well” and it is beginning to see the full potential of combining its expertise in commercial risks with the firm’s distribution.

Priority driven

“We also further advanced in our Payer-to-Partner strategy by launching our own medical centers [centres], notably in Mexico and Egypt, with the aim to simplify and enhance the healthcare journey of our customers,” Burberl added.

Buberl concluded that the firm has made good progress on this year’s priorities such as continuing to reduce the ownership of its life and asset management activities in the US and deleveraging the group whilst accelerating its Payer-to-Partner strategy within emerging countries.