Global re/insurer AXA increased its revenues by 5% to €79.7 billion during the first nine months of 2019, helped by its AXA XL division, which recorded a strong performance despite above-average catastrophe losses.
AXA XL grew its revenues by 11% to €14.2 billion, mainly driven by its P&C Insurance and Specialty segments.
Reinsurance business still managed to increase revenues by 2% to €3.3 billion during this period, but was weighed down by the series of severe natural catastrophes that impacted the company through Q3 and into Q4.
AXA XL estimated losses from Hurricane Dorian at €100 million and Typhoon Faxai at €120 million, before tax and reinsurance, with most of the costs hitting its Reinsurance segment.
Additionally, Typhoon Hagibis, which hit Japan in October, is expected to have a €200 million impact on AXA XL’s Q4 results.
Given the severity of these events, and combined with ongoing wildfires in California and other small cat events, management estimates that AXA XL may incur claims charges of €400 million in excess of its normalised cat level for the second half of 2019.
AXA XL explained that the revenue growth in its Reinsurance segment was mainly driven by higher volumes in Specialty lines, partly offset by selective underwriting in Property Cat and Casualty lines.
For P&C Insurance, AXA XL revenues were up 18% to €6.9 billion, mainly driven by Professional and other Casualty lines, Property lines, and North America Construction lines.
Revenues for Specialty business, meanwhile, increased by 8% to €3.7 billion, driven by Political Risks, Aviation, Accident & Health, and Fine Art & Species. This was partly offset by selectivity in London Wholesale.
Overall, AXA reported growth across all geographies, with strong momentum identified in Europe (+3%), France (+4%), Asia (+4%), and International (+5%), helped by contributions from Mexico and Turkey.
Total revenues similarly increased in all business lines, with Property & Casualty (+5%), driven by Commercial lines (+7%) and Personal lines (+2%), Health (+6%),with growth across all geographies, and Life & Savings (+4%), notably from higher sales of capital light G/A Savings as well as Protection products.
“AXA delivered another strong operating performance in the first nine months of 2019”, said Gérald Harlin, Deputy CEO and Group CFO of AXA. “AXA’s revenues grew overall by 5%, notably with a continued strong growth dynamic in P&C Commercial lines and in Health, and with all of AXA’s geographies contributing to this strong growth.”
“AXA XL achieved significant revenue increases, notably in P&C Insurance and Specialty,” Harlin explained. “The favorable pricing environment in Insurance continues to improve, with the third quarter renewals experiencing significant rate increases.”
“AXA’s Solvency II ratio was 187%, well within its target range, demonstrating the strength and resilience of the Group’s balance sheet, even in the context of very low interest rates at the end of September.”
He continued: “The recently announced sale of AXA Bank Belgium marks another important step in the further simplification of AXA’s profile and focus on preferred segments, in line with its Ambition 2020 strategy.”
“I would like to thank all our colleagues at AXA for their commitment and support for achieving these results, as well as our clients for their continued trust.”
