AXA Earnings Fall 47.6% to $1.06 Billion

March 15, 2002

France’s AXA Group reported lowered cash earnings of € 1.201 billion ($1.059 billion) for the year 2001, despite a 2 percent rise in gross revenues to € 74.8 billion ($65.97 billion).

Like almost everyone else in the insurance industry AXA suffered from the events of Sept. 11 (around $500 million), the deterioration in equity values ($561 million) and the Enron bankruptcy ($60 million). “2001 was a very difficult year with the overall industry having been shaken by the triple impact of a global economic slowdown, a fall in financial markets that negatively affected companies’ invested asset values, and the September 11 terrorist attacks in the U.S.,” Henri de Castries, AXA CEO stated in the announcement.

Despite the near 50 percent drop, the company registered several bright spots, notably in its earnings from operations which increased by 20 percent from €1.2 billion ($1.05 billion) to € 1.5 billion ($1.323 billion). De Castries indicated that operations were “on the right track” to grow by 20 percent this year.

The property casualty sector was the hardest hit, mainly by the Sept. 11 attacks, but there was bright spot there too, as total revenues rose 2.4 percent to €15.9 billion ($14 billion). P/C operations now represent 21 percent of AXA’s revenues.

The combined ration fell to 112.5 percent from 114.4 percent in 2000, and de Castries reiterated one of the company’s main goals of reducing it to 104 percent. “Our focus has been, and will continue to be, on reaping the benefits of tariff increases, tighter underwriting, better claims management and expense reductions,” he stated. “Current accident year loss ratios have improved in all major countries, except in Germany which was impacted by the claims associated with September 11 terrorist attacks.”

Both the International Insurance division and AXA Corporate Solutions, which includes reinsurance activities suffered losses last year, again due to the Sept. 11 attacks.

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