France’s AXA earned total revenues of Euro 56.911 billion in the first nine months of the year, compared to Euro 55.539 billion in the same period last year, a 2.5 percent increase. Factoring in exchange rate movements and accounting changes to calculate a “comparable basis,” results show an increase of 5.3 percent. The dollar is now worth slightly less than the Euro.
Calculated on this comparable basis, AXA announced that Life & Savings activities, which make up 64 percent of the group’s total revenues rose increased by 5.8 percent to Euro 36.3 billion, boosted by 10.2 percent growth in the this quarter “with significant improvements in the US and Japan.”
Property & Casualty revenues, which accounted for 22 percent of total revenues, increased by 5.1% from the same period last year to Euro 12.5 billion, “resulting from strong rate increases in all major European countries combined with stricter underwriting.”
Asset Management fees, however, which represent around 5% percent of total revenues, declined by 4 percent to Euro 2.6 billion, due mainly to “weak financial markets, while AXA said that “International Insurance revenues, which represent 8% of total revenues, were Euro 4.8 billion, up 9.8%, driven by selective underwriting and significantly higher premium rates.”
“Revenue growth accelerated in the third quarter of 2002 in our major operations, demonstrating the underlying strength of our businesses and the success of our focused strategy” stated CEO Henri de Castries. “The introduction of new products and the adaptability of our salesforce have enabled the Group to efficiently face a difficult economic environment. The fundamentals of our industry are intact, and it is one of the few industries to enjoy a growing customer base, an increased demand for financial protection products, and a positive pricing cycle in non-Life. ”
He added that the “Group is benefiting from this, as demonstrated by the growth in Life & Savings and Property & Casualty revenues of 10% and 6%, respectively, in the third quarter of 2002.” He also indicated that AXA expected to achieve the cost savings of around $700 million it had announced as a target at the beginning of the year, and predicted that there would be an improvement in its combined ratio.
DeCastries, however, backed away from making any definitive predictions for the full year’s results. He reaffirmed a statement he made in September that cited the sharp drop in global equity values was the principal cause of the unredictability. “Market volatility is such that we cannot predict operating performances for our Life & Savings and Asset Management operations,” he stated, “even if they have proven to be resilient in the first half of 2002. Overall, we remain cautious on 2002 operating earnings growth.”
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