AXA net income drops 11% in H1 2018

French insurer AXA has reported a decline in net earnings in the first half of 2018 due to the impairment of intangible assets linked to the transformation of its Swiss Group Life business, the negative impact from the change in the fair value of financial assets and derivatives, as well as exceptional charges linked to the  IPO of AXA Equitable Holdings.

AXA’s net income declined 11 percent year on year to €2.80 billion in the first half of 2018. The change in the fair value of assets and foreign exchange fluctuations reduced earnings by €346 million in the first six months of 2018 compared to €154 million in the same period a year ago. Exceptional and discontinued operations cost the company €361 million in the first six months compared to a positive contribution of €39 million in the same period of 2017. Integration and restructuring costs increased to €89 million from €51 million a year ago.

Adjusted for these factors, earnings improved to €3.63 billion in the first six months of 2018 compared to €3.48 billion in the same period a year ago.

“AXA delivered a very strong operating performance in the first half of 2018, with a 6 percent increase in underlying earnings per share, towards the top end of our Ambition 2020 target range,” said CEO Thomas Buberl. “This result was supported by a strong increase in technical profitability across all our businesses,” Buberl added.

The group’s current year property/casualty (P&C) combined ratio deteriorated by 0.5 points to 97.1 percent in the first half of 2018, driven by higher natural catastrophes and other natural events in Europe. Favourable prior year reserve developments were higher at -2.1 points, improving the all-year combined ratio by 0.8 points to 95.0 percent.

“Our simplified operating model is bearing fruit,” Buberl said. “We have a strong growth dynamic across our geographies, especially in France and Europe, and in our preferred segments with Protection new business volumes up 10 percent and Health revenues up 7 percent,” Buberl added.

Overall, the group’s gross revenues declined 1 percent year on year to €53.60 billion in the first half of 2018.

“In the first half of 2018, we have taken major steps in our transformation journey through the successful listing of our US operations and our strategic decision to acquire the XL Group,” Buberl said. “We also announced innovative partnerships with ING and Uber, the transformation of our Swiss Group Life business and the planned disposal of AXA Life Europe,” Buberl noted.

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AXA net income drops 11% in H1 2018

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