Global insurer AXA has reported a 4% increase in underlying earnings for 2022, which finished the year at €7.3 billion and were boosted by growth in the company’s Property and Casualty (P&C) segment despite significant reductions in natural catastrophe exposure for AXA XL Reinsurance.
The firm said earnings reflected higher investment income and a resilient underwriting result, which was also partly offset by the impact of the war in Ukraine and elevated motor in Europe.
The Life & Savings segment also reported an 11% increase in earnings and benefited from a higher technical margin in France and Japan and lower expenses, partly compensated by a lower investment margin, but Health was down 11% due to higher COVID claims in Japan.
Total revenues were similarly up 2%, driven by growth in P&C as both commercial and personal lines benefited from favourable price effect, with revenues up by 5% to €31.3 billion for the former and by 4% to €17.0 billion for the latter.
Meanwhile, for AXA XL Reinsurance, revenues decreased by 27% to €3.2 billion as a result of the reductions in nat cat exposure, partly offset by favourable price effects.
However, the group’s overall net income decreased by 11% over 2022 to €6.7 billion, AXA reports, mainly due to a decline in the value of invested assets and derivatives from unfavourable market impacts.
For commercial lines, AXA reports that revenue growth was driven by Europe and France, where it enjoyed pricing improvements and higher volumes, as well as by strong volumes in Travel for AXA Assistance.
This was partly offset by a small decrease for AXA XL Insurance as better pricing across most lines and higher volumes in Property lines were more than offset by lower revenues in North America Professional lines and by continued underwriting discipline.
AXA combined ratio for the year was 96.6%, up 0.1 point from 2021, reflecting elevated motor claims, the impact of the war in Ukraine and lower prior years reserve development, offset by lower natural catastrophe charges, including from the reduction of exposure for the reinsurance unit.
Looking ahead, management believes that AXA remains positioned to deliver underlying earnings per share growth above the previously communicated 3-7% CAGR target range over the three-year period that runs to the end of 2023.
“AXA delivered a strong performance in 2022 despite a challenging environment, a confirmation of the resilience of our business model,” said AXA CEO Thomas Buberl.
“We remain focused on executing our strategy. We recorded good growth across our technical and cash-generative businesses, particularly in P&C Insurance, Health and Protection, while continuing to reposition away from Nat Cat reinsurance and traditional General Account business,” he continued.
“Our fundamentals are strong and our distinctive franchise can deliver sustainable growth in the future, in particular by addressing new areas of coverage, including from the energy transition.”
