With its investor day being held today, French insurance and investment giant AXA has said it expects the group’s profitability to improve over the next two years due to fresh U.S business bought in by its XL arm, and stated that focus would now be on expanding its operations in Asia.
The insurer said the $15.3 billion all-cash acquisition of Bermuda-based reinsurance firm XL helped broaden its range of business.
AXA also raised its expected synergies from the XL purchase to €500 million from €400 million, and raised its dividend payout range to between 50% and 60% from 45% and 55%.
Following the XL acquisition and stock market listing of its U.S operations, AXA says it is now looking to develop more in Asia.
AXA has already hired a series of leading managers in the region, such as Gordon Watson, Chief Executive Officer for Asia.
“In just nine months, Gordon has attracted some of the best leaders in Asia with significant local expertise to propel AXA to become the next insurer of choice in the region,” AXA CEO Thomas Buberl said during a presentation to investors.
Buberl said last year that he wanted the insurer, Europe’s second largest, to focus on six emerging countries, with four of them in Asia.
Despite the region representing roughly half of the world insurance market’s growth, “AXA in Asia has underperformed over the past few years,” Buberl added.
The company this week purchased the remaining 50% of Chinese property and casualty (P&C) insurer AXA Tianping that it did not previously own, in a €584 million transaction.
AXA also raised on Wednesday its expected adjusted return on equity (ROE) to between 14% and 16% in 2019 and 2020, up from a previous target of 12% to 14%.
