AXA, the Paris-based global financial and insurance group, reported slightly lower total revenues for the first quarter of 2003 of 20.431 billion Euros ($23.495 billion), down 3.3 percent in absolute terms compared to the 21.12 billion Euros ($24.288 billion) it earned in the same period last year.
On a comparative basis the company’s total revenues rose by 5.9 percent. The two figures differ due to currency fluctuations, which have seen the Euro rise in value against the U.S. dollar from around 80 cents a year ago to $1.15 in recent trading, ongoing weakness in the equity markets, asset sales and restructuring.
AXA’s core P/C Group and Life and Pensions Group both showed good gains. The life group’s revenues, which contribute around 60 percent of AXA’s total, rose by 13 percent on a comparable basis to 12.165 Euros ($14 billion), while Q1 P/C revenues rose 5.2 percent on an absolute basis (4.3 percent on a comparable basis) to 5.334 billion Euros ($6.134 billion).
The declines came from a drop in asset management fees, which decreased by 14.4% to 700 million Euros ($805 million); “due to continued adverse equity markets,” and the decrease in reinsurance revenues following the restructuring at AXA Re, which put some of the U.S. business into runoff. However, the company noted that “net inflows [in investment management accounts] were a positive Euro 6.0 billion [$6.9 billion] in the first quarter of 2003.”
AXA’s Chief Executive Officer Henri de Castries stated: “We are pleased with this first set of activity data, which bodes well for the future. Going into 2003, significant progress has been made in the Group’s operating efficiency, as underlined by the accelerating growth achieved in AXA’s key insurance operations and by the successful repositioning of AXA RE which should improve its profitability while reducing its risk exposure. Furthermore first quarter indications on our combined ratio, expense reduction program and life new business contribution are in line with our expectations or even better.”
The full report can be accessed on the company’s Web site at: www.axa.com.
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