French insurer AXA has today announced a year-on-year rise in total gross written premiums (GWP) and other revenues of 2% to €55.7 billion for the first half of 2023, driven by 7% growth at AXA XL, its property and casualty (P&C) and specialty division.
Across AXA XL, GWP and other revenues totalled €30.4 billion in H1 2023, driven by 9% growth to €18.9 billion in commercial lines, and 5% growth to €9.8 billion in personal lines, partially offset by a decline of 3% to €1.7 billion at AXA XL Reinsurance.
The firm attributes the expansion to higher volumes in property and specialty lines and favourable pricing across most business lines, somewhat offset by a reduction in premiums in North America professional lines and continued underwriting discipline in certain regions.
Within AXA XL Re, the company highlights the continued reduction in property catastrophe exposure, which is in line with its strategy, partly offset by strong price increases. AXA notes that within this part of the business, casualty and specialty premiums did increase, mostly driven by favourable price effects.
The AXA XL H1 2023 combined ratio improved five percentage points, year-on-year, to 90.9%, which AXA says reflects a higher claims discounting effect, favourable prior years reserve development, and lower natural catastrophe charges.
Underlying earnings at AXA XL rose by a significant 54% to more than €2.7 billion in H1 2023, which the firm attributes to a higher technical margin, partly offset by a higher impact of insurance finance expenses.
Turning to AXA’s life and health segment, and GWP and other revenues experienced a 3% dip year-on-year to €24.5 billion, driven by a 1% decline in life and a 6% dip in health.
At the same time, the present value of expected premiums fell 9% year-on-year to €23.3 billion, attributable to the impact of the increase in interest rates, partly offset by higher volumes, notably in Hong Kong, as well as favorable change in persistency assumptions in France, explains the firm.
Underlying earnings within the life and health business fell 13% year-on-year to €1.6 billion in H1 2023, with an 8% decline in life and a substantial 33% decline in health business.
Group-wide, AXA has reported GWP and other revenues of €55.7 billion, as the growth at AXA XL more than offset declines in both life and health and asset management, which saw a 5% decline to GWP of €700 million.
AXA’s total underlying earnings increased 19% to €4.1 billion in H1 2023 compared with €3.5 billion a year earlier, while net income was flat at €3.8 billion.
Thomas Buberl, Chief Executive Officer (CEO) of AXA, commented: “AXA delivered another good set of results in the first half of 2023, reflecting the strength of our business model. We delivered robust growth in technical lines and achieved an 8%4 increase in underlying earnings per share and a return on equity of 16.6%.
“We remain focused on executing our strategy, built on two pillars balanced between Commercial and Retail businesses. In P&C Commercial lines, premiums were up 9% and in P&C Retail lines, premiums were up 5%, both benefiting from a favorable pricing environment. We also continued to see good business dynamics in Employee Benefits, and a high-quality mix in our Life & Health Retail business. Today’s announcement6 of the acquisition of Laya, a leading health insurer in Ireland, will further strengthen our business.
“Our distinctive franchise generated Euro 4.1 billion in underlying earnings, reflecting strong operational performance across our businesses and our ability to deliver consistent results despite a volatile environment. We continue to take actions to sustain attractive margins, including through disciplined pricing. We are on track to achieve our Group underlying earnings target for the year and we are confident in our capacity to deliver long- term revenue and profit growth.
“The Group has further strengthened its balance sheet with a Solvency II ratio of 235% driven by operating capital generation and disciplined ALM that will further reduce our sensitivity to financial risks. Our asset allocation remains prudent and diversified.
“We recently announced ambitious new climate targets. For the first time, the Group set decarbonization targets on its P&C Insurance portfolio. We will continue working together with our clients and stakeholders, deploying our resources to support the transition to a low-carbon economy.
“I would like to thank all our colleagues, agents and partners for their commitment and support, as well as our customers for their continued trust.”
Looking forwards, AXA highlights the favourable pricing environment in P&C, stating that it is confident in its ability to sustain its strong underwriting margins across commercial and personal lines, supported by pricing actions and cost discipline.
The firm adds that the below-average charges from natural catastrophes in H1 2023, and the continued high interest rate environment have provided some tailwinds on current year margins. The group is maintaining its prudent stance on reserving and is committed to delivering sustainable and attractive P&C results over the cycle, says AXA.
