AXA to float its US operations

French insurer AXA has said that it intends to list a minority stake of its US operations in the first half of 2018 to create “significant additional financial flexibility to accelerate AXA’s transformation.”

The unit will consist of its US Life & Savings business and AXA Group’s interest in asset manager AllianceBernstein (AB).

In the US, AXA offers insurance and annuity products serving more than 2.5 million customers, and owns an interest of approximately 64 percent in AB, a global asset manager with $498 billion in assets under management as at 31 March 2017.

The IPO of the US unit is expected to create a leading US-based diversified financial institution benefiting from enhanced strategic flexibility, visibility and stronger growth prospects as a listed company, according to a statement. The proceeds of the listing are to be reinvested by AXA in priority segments and/or potentially returned to shareholders, depending on opportunities and market conditions.

“We are very proud of our strong financial performance track-record over the past years, which resulted from a dramatic shift in new business towards a more balanced and capital effective product suite, supported by strict discipline in terms of product development, pricing, hedging and reserving,” said Mark Pearson, president and CEO of AXA Financial (United States).

“With Seth Bernstein, the new AB CEO, we have the unique opportunity together to create a leading US life insurance, annuity and asset management company. Together we will be focused on delivering superior wealth accumulation, protection and retirement-focused products for our customers and creating sustainable value for our stakeholders.”

The listing of the US operations would bring significant additional financial flexibility for AXA, benefiting from supportive macroeconomic conditions in the US, and create an option to further reduce AXA’s exposure to financial risks while further strengthening its economic capital position, according to the company.

To enhance the capitalization of the US operations ahead of the IPO, about $1.0 billion of outstanding debt owed by AXA US to AXA Group will be converted into equity.

The proceeds of the transaction would be reinvested in the group’s priority lines of business, including Health, Capital-light Savings, Protection and P&C commercial lines, in line with the Ambition 2020 strategy, and/or potentially returned to shareholders depending on acquisition opportunities and market conditions, the company said.

Today’s stories

Hannover Re CEO shows optimism for P&C business

Lemonade expands insurance offering to California

Insurers face stretched balance sheets from cyber aggregation

800 jobs to be cut in Standard Life and Aberdeen merger

AXIS Capital announces new CFO

Aon hires leader of cyber solutions and CEO of Stroz Friedberg

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.