Global insurer, AXA Group, has announced that its subsidiary AXA France Vie has entered into a reinsurance agreement with AXA Réassurance Vie France (ARVF), a reinsurer co-owned by AXA Assurances Vie Mutuelle1 and AXA Assurances IARD Mutuelle
According to the announcement, the reinsurance agreement with ARVF will cover a total of €12 billion of Savings reserves, which includes €10 billion of traditional G/A3 Savings.
From what we understand, the transaction is expected to result in a cash upstream to AXA S.A. of €0.6 billion and to have ca. 2 points favourable impact on AXA Group Solvency II ratio as of December 31, 2023.
At the same time, the transaction is also expected to result in a reduction in Underlying Earnings of ca. €50 million per annum from 2024 onwards.
AXA has confirmed that it intends to offset the resulting earnings dilution with a ca. €0.5 billion share buyback, which is to be launched following the release of the Group’s full year 2023 results and new strategic plan.
Furthermore, this transaction is also set to have an immaterial one-off impact on AXA Group’s Net Income and to result in a reduction in AXA Group’s net Contractual Service Margin of ca. €0.4 billion from 2024.
