AXA reports 3% drop in gross revenue for UK and Ireland in 2020

AXA Group has reported a 3% drop in its gross revenue between 2019 and 2020 in the UK and Ireland, reaching a total of €5,215m.

For property and casualty (P&C) business in the UK and Ireland, gross revenue has fallen by 1% in the 12 months to 31 December 2020, to now sit at €3,457m.

These figures form part of AXA Group’s 2020 full year financial results, published today.

Looking at revenue contribution within the UK and Ireland’s commercial lines portfolio, commercial motor fell by 8% between 2019 and 2020 to reach €606m, while commercial non-motor improved by 2% to €928m.

Meanwhile, for the UK and Ireland’s personal lines book, personal motor revenue grew by 1% to €1,349m over the course of last year, while personal non-motor products achieved a revenue of €574m for 2020, which is 4% lower than 2019’s figure.

P&C revenues in the UK and Ireland overall fell by 1% to €3,457m.

Revenue from AXA XL, however, grew by 3% to reach €18,346m at the end of December 2020.

Speaking on the UK results specifically, Antimo Perretta, AXA Group’s chief executive officer for European markets, said: “In the UK market, our performance has suffered logically from the situation coming from Covid.

“Overall, I’d say that Covid and the economic environment has impacted us in the growth of P&C and especially in the commercial lines.

“We are still confident for the future because we have very good products and also the way that we are working with our partners will help us to grow in the coming years.”

Protecting Covid-19 exposure

Across the AXA Group, “the impact on 2020 underlying earnings from Covid-19 related P&C claims and solidarity measures was €1.5bn, post-tax and net of reinsurance”, which is in line with AXA’s predictions published in 2020’s H1 results.

The financial effect of lockdown measures in the second half of 2020, however, remained “neutral” with “additional claims in commercial lines being offset by frequency benefits in retail lines”, such as motor.

For 2021, AXA has “significantly decreased” its exposure to further claims connected to the pandemic, said Alban de Mailly Nesle, AXA Group’s chief risk officer. Speaking to journalists this morning, de Mailly Nesle explained that this has been achieved by adding Covid-19 exclusions to event cancellation and business interruption policies.

He said: “In 2021, we have significantly decreased our exposure to further claims from Covid. In 2020, those claims came mainly from two lines – event cancellation and business interruption. Event cancellation, the covers of those events exclude the Covid.

“For busines interruption, we have also engaged in a process to get rid of the Covid covers in our non-damage business interruption policies. That will be completed at the end of the year when all policies have been renewed.

“Around April 60% to 70% of our policies would have been renewed with the exclusion of the Covid cover. Therefore, we don’t expect significant claims in 2021 coming from Covid.”

Etienne Bouas-Laurent, chief financial officer at AXA Group, added: “In order to reduce our exposure going forward, we reviewed and revised the clauses of our non-damage business interruption contracts across the group by explaining the exclusion factors.

“The roll out of these new contractual clauses are underway in the context of the campaign to renew our policy contracts.”

Robust and resilient

Across the group, gross revenue amounted to €97bn for 2020, which is a 7% drop from 2019’s number. Underlying earnings also decreased by 34%, to €4,3bn, while net income decreased by 18% to reach €3.2bn.

Group-wide, P&C total revenues improved by 1% to €48.7bn. P&C underlying earnings fell by 51% thanks to the effects of the Covid-19 pandemic, reaching €1,644m.

Speaking to journalists this morning, the message from AXA Group’s senior leadership was very much around resilience, robustness and solidity.

Thomas Buberl, chief executive of AXA, said: “AXA’s revenues were resilient in 2020, down just 1% compared to the previous year, reflecting the relevance of our strategic choices and business mix.

“Our preferred segments, P&C commercial lines, health and protection, continued to perform well, growing by 3% in 2020 and accelerating in the fourth quarter (+5%).

“I would like to thank all AXA colleagues, agents and partners for their unwavering commitment during these challenging times, as well as our clients for their loyalty and trust.

“Our strategy is aligned with the interests of all our stakeholders and firmly rooted in our purpose - ‘Acting for human progress by protecting what matters’.”

During the press call this morning, Buberl also announced AXA’s ‘Driving Growth 2023’ plan, which is structured around five main pillars of work:

• Growing the firm’s life and protection business.
• Simplifying the customer journey and improving productivity.
• Enhancing underwriting performance.
• Strengthening the insurer’s leadership around climate change issues.
• Increasing cash flows across the group.