AXA Announces Decline in Embedded Value for 2001

June 13, 2002

France’s AXA Group announced that the giant insurer’s overall embedded value – the total of shareholders’ net assets and the value of insurance in force – fell 1.4 percent last year to €34.9 billion ($33 billion), while the embedded value per share declined by 4.2 percent to €20.11 billion ($19 billion).

The main reasons are familiar ones. Big losses from the Sept.11 attacks, the explosion of the AZF Chemical plant in Toulouse and other natural catastrophes coupled with falling interest rates and a stagnant worldwide equity market reduced the Group’s income at the same time that asset values were decreasing.

AXA CEO Henri de Castries issued an encouraging statement, noting that “the Group embedded value decreased slightly in one of the toughest environments the industry had to face in 20 years.” He went on to affirm that the relatively slight decline showed that AXA’s diversification strategy was showing results “in the most promising markets and of the Group’s focus on profitability.” He added that the results were “proof of the Group’s commitment to achieving sound and sustainable growth which will benefit our shareholders in the long run.”

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