Reinsurance News

AXA reports 2% revenue growth for Q1; favourable price effects at AXA XL

4th May 2021 - Author: Luke Gallin

Global insurer AXA has reported total revenue growth of 2% for the first quarter of 2021 to €31 billion, driven in part by favourable price effects at AXA XL which helped its commercial lines segment grow by 4% to €11.6 billion during the period.

axa-logoAcross AXA’s property and casualty (P&C) operation, total revenue increased by 2% to €17.4 billion, reflecting commercial lines revenue expansion of 4%.

The carrier notes that this increase in revenues was mainly driven by 4% growth at AXA XL, driven mostly by positive price effects of 11% across the portfolio, somewhat offset by continued disciplined exposure reduction of 7%, notably in the firm’s International Casualty and Property business.

The higher revenues in P&C also reflects 4% growth in France as a result of favourable price effects on large accounts; and also a large multi-year Motor contract in Singapore, explains AXA.

At AXA XL, price increases on renewals remained robust in the opening quarter of the year, up 11% in reinsurance and up 15% in insurance.

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Revenues within the Personal Lines segment were stable at €5.7 billion during Q1 2021.

While the performance of AXA XL was solid in Q1, AXA does expect the unit to experience a slightly higher than usual natural catastrophe charge, including from the severe winter storms in the U.S. in February, and a more favourable than expected non-cat loss experience.

As a result, management feels that AXA XL is on track towards its €1.2 billion underlying earnings target for 2021.

“AXA’s total revenues grew by 2% in the first quarter, in a context which continued to be marked by Covid-19 related restrictions. This good performance was underpinned by sustained growth in our preferred segments, notably with P&C Commercial lines up 4%, Health up 5%, and with continued positive flows and a favorable mix in L&S,” said Etienne Bouas-Laurent, Group Chief Financial Officer (CFO).

“AXA XL performed well in the quarter, pursuing its underwriting discipline, achieving significant price increases, targeted exposure reductions, and growing revenues by 4%. AXA Investment Managers also delivered strong performance, with Euro 13 billion net inflows and revenues up 17%.

“AXA’s balance sheet remains very strong, with a Solvency II ratio of 208%at the end of March, up 8 points from December. This does not include the positive impacts from the issuance of the subordinated Green bond in April and the expected completion of the AXA Bank Belgium disposal.”

In the Health business, AXA has reported total revenue growth of 5% to €4.2 billion, with growth witnessed across the majority of geographies.

Life & Savings revenue remained stable during the first quarter of 2021 at €8.6 billion, reflecting strong growth in both Asia and France.

At the same time, AXA’s asset management business has recorded revenue growth of more than 17% to €359 million, driven by higher management fees from both higher assets under management and an improved business mix, as well as higher performance fees.

“As a leader in the sector on climate and societal topics, AXA issued its first Green bond, has pledged to invest Euro 2 billion in SMEs impacted by the Covid-19 crisis in France, and will act as chair of the new Net-Zero Insurance Alliance. AXA also announced that it is collaborating with Microsoft to build a digital healthcare platform, enabling a virtual healthcare system that is open to all.

“I would like to thank AXA’s employees, agents and partners for their commitment especially in this prolonged challenging context, and our clients for their loyalty and continued trust,” said Bouas-Laurent.

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