AXA XL, the property and casualty (P&C) and specialty risk division of AXA, has reported revenue growth of 4% to €6.2 billion in the first-quarter of 2022, despite a steep reduction in natural catastrophe exposure within reinsurance.
French insurer and reinsurer AXA has now released its Q1 2022 results, which show revenue growth across the group of 1% to €31.3 billion, reflecting growth in P&C, personal lines and health, somewhat offset by a reduction in life & savings.
Within its P&C operation, commercial lines revenues grew by 2% to €18 billion, with particularly strong growth of 4% in commercial lines primary insurance across most geographies.
Overall, revenues were stable at AXA XL Insurance, with the firm reporting growth in property lines and lower revenues in casualty, which is a reflection of continued underwriting discipline and a focus on profitability.
The growth at AXA XL was offset in Q1 2022 by an 18% decline in revenue at AXA XL Reinsurance to €1.5 billion, driven by a 12% reduction in natural catastrophe exposure.
Insurance and reinsurance industry losses from natural catastrophes have been elevated recently, with 2021 being another above-average year for losses. In response, some have chosen to retreat from the nat cat space in an effort to reduce the volatility of their portfolio, which is what’s happened at AXA XL Reinsurance in Q1 2022.
Price increases on renewals at AXA XL remained strong in the first quarter, at 10% in insurance and 8% in reinsurance.
In personal lines, revenues grew 1% to €5.8 billion, driven by higher revenues in non-motor across all geographies.
Alban de Mailly Nesle, Chief Financial Officer of AXA, commented: “AXA performed well in the first quarter of 2022, delivering high-quality revenue growth. We continue to see strong performance in our technical and fee-based businesses across the Group.
“Our mix is excellent, with Health revenues growing by 6%, Unit-Linked by 5% and P&C Commercial lines Insurance by 4%, with continued favorable pricing momentum across geographies and notably at AXA XL.
“The Group remains strongly focused on disciplined execution. We have been repositioning our Reinsurance portfolio with Nat Cat exposure already trimmed by 40% across first quarter’s renewals, while we continue to deliver a high-quality Life & Savings business mix, with further reduction in traditional G/A.”
Adding: ““We delivered this performance amid the uncertainty from rising geopolitical tensions sparked by the war in Ukraine. As an organization with deep European roots, we are profoundly saddened by the tragic situation in Ukraine. AXA is fully respecting all applicable international sanctions and has stopped underwriting new insurance business with respect to Russian-owned assets located in Russia. While it is too early to provide precise guidance, based on our current assessment and the current scope of the conflict, we currently expect the net underwriting losses from the crisis to be akin to a mid-sized Nat Cat event.
“I would like to warmly thank AXA’s employees, agents and partners who have expressed their solidarity and participated in several actions to help address the humanitarian crisis, through donations and volunteering initiatives.
“AXA is well positioned against the current uncertain macroeconomic backdrop, with a strong balance sheet including a Solvency II ratio at 224%. Our strategic transformation to move away from financial risks is proving particularly relevant in this environment.
“We remain confident in our ability to execute our strategy, focusing on our core attractive segments, in particular Health, Protection and P&C Insurance where the need for insurance coverage remains strong.”
