Global insurer AXA has today reported 1% growth in gross revenues to €55 billion for the first half of 2022, although within AXA XL Reinsurance revenues fell by 21% on the back of a strong reduction in natural catastrophe exposure.
Alongside the growth in gross revenues, French insurer AXA has reported 4% growth, year-on-year, in underlying earnings to €3.9 billion, and net income of €4.1 billion, compared with roughly €4 billion last year.
Supporting the overall increase in revenue in the period was the Property & Casualty (P&C) segment, which saw total revenue growth of 1% to €29.3 billion in H1 2022. Within P&C, commercial lines revenue also jumped 1% to €19.7 billion, with 4% growth in commercial lines insurance, partly offset by a significant reduction at AXA XL Reinsurance.
Within AXA XL Reinsurance, the firm looked to further reduce the volatility of the book in the opening six months of the year, which led to a 21% decrease in revenue, year-on-year, to €2.2 billion. The firm notes that this decrease in natural catastrophe exposure is in line with its strategy, and was partly offset by favourable price effects.
At AXA XL Insurance, revenues came in slightly lower with favourable price effects across all lines and higher new business in property.
Within its personal lines business, revenues increased by 3% year-on-year to €9.5 billion, which the company attributes to higher revenue in non-motor and motor.
All in all, the P&C segment has produced a combined ratio of 93.7% for H1 2022, which is up 0.7 percentage points. According to AXA, the slight increase reflects higher motor frequency from the non-repeat of mobility restrictions in France and in Europe in H1 2021, yet with the overall frequency still being below pre-Covid levels.
Additionally, the firm notes higher large losses primarily from the impact of the war in Ukraine of €300 million, pre-tax and net of reinsurance.
However, these were partly offset by a reduction in the expense ratio, while AXA says that the impacts of natural catastrophe events and prior reserve development were broadly stable.
Underlying earnings at P&C were up by 4% to €2.8 billion, which the firm attributes to higher investment income and lower taxes, partly offset by the slightly higher combined ratio.
Within its Life & Savings operation, AXA is reporting that total revenues fell by 5%, year-on-year, to €16 billion. While protection revenues increased by 2%, this was more than offset by an 11% decline in unit-linked revenues and a 12% decline in G/A savings revenues. Overall the Life & Savings unit saw its underlying earnings increase by 7% to more than €1.3 billion.
Turning to the company’s Health business and total revenues increased by 13% to €8.8 billion, with AXA reporting growth across all geographies. Group business increased 21% to €4.5 billion, as individual business increased by 6% to €4.3 billion. The Health combined ratio amounted to 94.9% in H1 2022, while underlying earnings increased 2% to €402 million.
On the asset side of the balance sheet, AXA has reported total asset management revenue growth of 4% to €788 million, net inflows of €14 billion, and average assets under management of €771 billion.
Thomas Buberl, Chief Executive Officer (CEO) of AXA, commented: “AXA delivered a strong performance in the first half of 2022, reflecting the strength of our operating model in a more challenging environment. The Group has achieved an +11% increase in underlying earnings per share, with strong organic earnings growth recorded across all our lines of business.
“Revenue growth was of high quality, with an excellent mix towards technical and fee-based business, notably across Health, Commercial Lines Insurance and Asset Management. In the meantime, we continued to reposition our portfolio away from Property Catastrophe Reinsurance and traditional General Account business.
“We reported strong technical profitability across all businesses, in particular in France and Europe delivering attractive and consistent performance, and AXA XL recording resilient results despite the impact of the war in Ukraine.
“Today the Group announced a Euro 1.0 billion share buy-back reflecting our robust operational performance, the strength of our balance sheet, and continued execution of our capital management initiatives. AXA is committed to financial discipline and to delivering long term shareholder value.
“The macroeconomic environment has become more uncertain. The Group is entering this period in a strong position, with a Solvency II ratio of 227%, and a resilient and diversified mix of business, which continues to shift away from financial risks. We are vigilant and are taking actions to counterbalance impacts from inflationary pressures and market volatility. We remain very confident in delivering our Driving Progress 2023 key targets, notably underlying earnings per share growth at the high end of our target range.
“The Group is well prepared to navigate this evolving environment thanks to the collective efforts and relentless engagement of all our colleagues, agents and partners and the continued trust of our clients.”
