Global insurer AXA’s P&C and specialty risk division, AXA XL, recorded a 4.2 percentage point improvement in its combined ratio in 2023 to 93.2%, as gross written premiums (GWP) and other revenues rose 7% year-on-year to €53 billion, despite a reduction in the reinsurance arm.
At AXA XL Reinsurance, premiums decreased by 5% to €2.3 billion in 2023, driven by a reduction in property catastrophe exposure, which is line with the firm’s strategy, somewhat offset by a positive price effect of 10.3%. The segment did see growth in specialty premiums, although this was mostly as a result of favourable price effects.
Offsetting the decrease in the size of the reinsurance book, AXA XL’s commercial lines business grew its premiums 9% year-on-year to €33 billion, driven by 5% growth at AXA XL Insurance on the back of higher volumes in property and specialty lines and favourable pricing across business lines.
There was also strong growth of 33% in Asia, Africa & EME-LATAM commercial lines business, supported by 8% growth in Europe, including 7% growth in France.
In the personal lines division of AXA XL, premiums increased 6% year-on-year to €17.8 billion, driven by growth in motor of 7%, and favourable price effects.
All in all, AXA XL’s all-year combined ratio strengthened 4.2 percentage points to 93.2% in 2023, driven by favourable reserve development, a higher claims discounting effect, and lower natural catastrophe losses.
P&C underlying earnings jumped by a huge 73% to €5 billion compared with €2.9 billion in 2022.
Turning to AXA’s Life & Health (L&H) business, and GWP and other revenues shrunk 2% year-on-year to €48.1 billion, with slight growth of 1% in life more than offset by a decline of 7% in the health business.
The present value of expected premiums (PVEP) increased 8% to €45.9 billion, as NBV (post-tax) increased 3% to €2.3 billion, the NBV margin fell 0.2 points to 5%, and net inflows amounted to -€4.1 billion.
In total, L&H underlying earnings fell 8% year-on-year to €3.2 billion, reflecting lower technical profitability in
life mainly due to unfavourable prior years reserve development on a run-off portfolio in protection, as well in health due to higher claims frequency in the UK.
In the firm’s Asset Management business, AUM was flat at €843 billion, although the average AUM fell 2% year-on-year to €736 billion, driven by unfavourable market effects. Asset management net inflows were -€11 billion, as revenues in the segment increased 2% to €1.6 billion, and underlying earnings came down 9% to €400 million.
Group-wide, GWP and other revenues increased 3% on a comparable basis to end 2023 at €103 billion. AXA’s underlying earnings increased 27% year-on-year to €7.6 billion, as net income jumped 45% to €7.2 billion.
Thomas Buberl, Chief Executive Officer of AXA, commented on the results: “AXA reported strong results in 2023, reflecting continued execution of its strategy. This also marks the completion of our “Driving Progress 2023” plan. The Group has successfully delivered on all its main financial targets, with underlying earnings per share growing 9%, cumulative cash remittance of Euro 16.4 billion, and Return on Equity of 14.9%, while maintaining a strong Solvency II ratio at 227%.
“In 2023, we continued to see good growth momentum in our core businesses including P&C, Protection, Capital-light G/A Savings and Health. This was partly offset by lower volumes in AXA XL Reinsurance from a reduction in Property Catastrophe exposure, and in Health following our decision not to renew two legacy international Group contracts. The Group reported Euro 7.6 billion in underlying earnings, reflecting a strong operational performance in P&C, in particular at AXA XL.
“Today we announce our new three-year strategic plan, “Unlock the Future”, building on our successful strategy that has delivered excellent performance. We will focus on growing and strengthening our core businesses by systematically scaling our distinct capabilities across the Group to deliver even more value to all of our stakeholders.
“I would like to thank all of our colleagues, agents and partners for their commitment and support, as well as our customers for their continued trust.”
