Global insurer AXA has reported a 61% rise in underlying earnings for 2021 to €6.8 billion, driven by a strong performance in its property and casualty (P&C) operation and a strong underwriting result, notably at AXA XL.
Across the Group, gross revenues were up by 6%, year-on-year, to more than €99.9 billion, while net income increased from €3.2 billion in 2020 to €7.3 billion in 2021. AXA’s reported return on equity improved by 5.1 percentage points in the period to 14.7%.
Within its P&C business, total revenues spiked 3% to over €49 billion, with growth evident across most geographies. In commercial lines, the firm has announced revenue growth of 5% to €32.7 billion, driven mostly by AXA XL and continued favourable price effects.
At AXA XL, the company reports that price increases on renewals were strong in 2021, rising by 15% in insurance and by 9% in reinsurance. At the January 1st, 2022, renewals, AXA XL Reinsurance achieved price increases of 8%, so in line with the previous year.
All in all, P&C underlying earnings spiked by a massive 151%, year-on-year, to over €4 billion, driven by the reduction in COVID-19 claims experienced in 2020, and a much improved underwriting performance at AXA XL.
In fact, at AXA XL, underlying earnings improved to €1.2 billion, which is line with the target for the year. The parent attributes the strong growth in earnings to both higher pricing and successful re-underwriting actions.
However, the unit did experience above normal catastrophe activity in 2021, driven by the floods in Europe, Hurricane Ida, and Winter Storm Uri. The firm notes that nat cat charges in excess of load were offset by favourable prior year reserve developments, mainly linked to a release of COVID-19 IBNR reserves.
When compared with 2020, the combined ratio improved by 4.9 percentage points to end 2021 at 94.6%.
In P&C personal lines, revenues increased by 1%, year-on-year, to €16.6 billion, driven by improved revenues in non-motor across all geographies.
In Life & Savings, total revenues rose by 9% to €33.3 billion, as net flows reached €5.6 billion and net business value rose by 8% to €2.6 billion. The segment’s underlying earnings increased by 3% from the prior year to €2.4 billion.
In AXA’s Health operation, total revenues jumped 5% to €15.2 billion, with growth evident across most geographies. Group business recorded growth of 9% to €7.2 billion, while individual business was up 3% to €8.1 billion. The segment’s combined ratio increased by 0.4 percentage points, year-on-year, to 95.1%, mostly as a result of the non-repeat of lower claims frequency in the context of the pandemic.
The Health unit’s underlying earnings reached €684 million in 2021, representing year-on-year growth of 2%.
Thomas Buberl, Chief Executive Officer (CEO) of AXA, commented: “AXA delivered an excellent performance in 2021 on all fronts. We have significantly transformed and simplified the Group in recent years and this strategy is producing strong results, with revenues and earnings increasing across all lines of business.
“We have continued to achieve particularly strong revenue growth in our technical and fee-based businesses, with P&C Commercial lines, Health and Protection each growing by +5%, Asset Management up +20% and Unit-Linked +25%.
“Our underlying earnings increased by +61% from last year, or +9% versus 2020 rebased, to Euro 6.8 billion. This reflects very strong technical performance across the Group, and in particular at AXA XL, which delivered Euro 1.2 billion underlying earnings following successful re-underwriting measures. AXA XL is now well positioned for sustained and disciplined growth.
“Considering the Group’s strong operational performance and balance sheet, the Board of Directors is proposing a dividend of Euro 1.54 per share, up 8% from last year which corresponds to a payout ratio of 56%. AXA is focused on growing highly cash generative businesses while limiting volatility, and on executing ambitious capital management and in-force initiatives, in order to support a sustained and attractive return.
“AXA is delivering on all five strategic actions of its “Driving progress 2023” plan. We expect to deliver at the high end of our earnings growth target range and exceed our cumulative cash upstream target under our plan.
“AXA has continued to develop its ESG initiatives throughout the Covid-19 crisis, and in 2021 further strengthened its climate commitments by extending oil and gas exclusions, and by taking new engagements to support climate transition and preserve biodiversity, dedicating Euro 1.5 billion to support sustainable forest management.
“I am proud of the Group’s performance in 2021 and through the Covid-19 crisis, reflecting the relevance of our strategy, the strong engagement of our people, agents and partners, and the continued trust of our clients.”
