AXA Group has entered into an agreement with global private equity firm Cinven for the potential sale of AXA Life Europe (ALE), the company’s Ireland-based Variable Annuity products platform, for €1.2 billion (US $1.4 billion).
The total cash proceeds for the sale of ALE, which has been closed to new business since 2017, would include €925 million from the potential sale of ALE shares and a capital distribution from ALE to AXA S.A. of €240 million.
Gérald Harlin, AXA’s Deputy Chief Executive Officer (CEO) and Group Chief Financial Officer, commented: “This transaction represents another important step towards improving the balance between technical and financial margin, in line with our Ambition 2020 “Focus and Transform” strategy.
“I would like to take this opportunity to thank AXA Life Europe’s management team and all the employees for their tremendous commitment over the years.”
Headquartered in Dublin, ALE has over 60 employees and manages a portfolio of 248,000 insurance contracts with €5 billion reserves. It distributed products across Europe through AXA’s network of entities in Germany, France, UK, Spain, Italy, and Portugal, as well as through third-party channels and via a reinsurance arrangement with AXA Japan.
The German insurance contracts account for more than 70% of ALE’s portfolio, and the policy administration services for these contracts will continue to be provided by AXA Germany.
AXA expects the ALE transaction to positively impact its Solvency II ratio by ca. 2 points, and noted that the Underlying Earnings (UE) generated from the business under consideration were €19 million in 2017.
The deal remains subject to customary closing conditions, and is expected to be finalised by the end of 2018 or early 2019.
