AXA Doubles Adjusted Earnings to $3.85 Billion

February 25, 2005

France’s AXA Group reported strong earnings results for 2004. Underlying earnings rose 34 percent to 2.7 billion euros ($3.58 billion) and adjusted earnings were 2.9 billion euros ($3.85 billion).

“2004 has been a very good year, with all businesses performing well and now on a path towards profitable growth,” stated Henri de Castries, Chairman of the Management Board of AXA,”

Earnings highlights included the following:
Life & Savings:
— Underlying earnings up 23 percent to 1.603 billion ($2.125 billion).
— New business contribution and new business value improved respectively by 40 percent and 51 percent 943 million euros ($1.25 billion) and 771 million euros ($1.03 billion).
— New business value margin strongly up at 15.9 percent (+4.4 points).

Property & Casualty
— combined ratio improved by 2.1 points to 99.3 percent, fuelling underlying earnings growth of 41percent to 1.063 billion ($1.41 billion).
— Resilience of International Insurance despite an unprecedented year for natural catastrophes, with underlying earnings up 10 percent to 155 million euros ($205.5 million).

— Very solid net inflows of 34 billion euros ($45.1 billion) for Asset Management which registered underlying earnings of 316 million euros ($419 million) up 26 percent (excluding the 2003 charge for mutual fund matters and legal proceedings).
— Embedded value per share up 15 percent to 18.73 euros ($24.82).
— Proposed dividend of 61 euro cents (80.8 cents) per share represents a 61 percent increase compared to 38 euro cents (50.36cents last year and a 40 percent payout ratio on adjusted earnings.
— Economic expenses were down 74 million euros ($98.1 million) (excluding MONY), bringing aggregate cost savings over the last four years to 1.3 billion euros ($1.73 billion).

“AXA teams have built a unique platform in terms of scale and diversification and our 2004 results provide additional proof of the effectiveness of our organization and strategy,” DeCastries continued. “All indicators are good. I am particularly pleased with our portfolio evolution: an increase of more than 500,000 new contracts in Property & Casualty, growth in Life new business and New Business Value, and strong net asset management inflows; all demonstrate the attractiveness of our product offering to our clients.”

AXA’s earnings bulletin also expressed optimism about future growth. It noted: “After several years of substantial improvements in our various businesses, notably in 2004, management believes that the Group is now in a unique position to take advantage of its earnings capacity and organic growth momentum. Superior geographic and business diversification should enable the Group to capture growth opportunities in its key life markets. In addition, management currently anticipates that 2005 should see the full benefit of the MONY integration which, as indicated previously, should contribute in 2005 at least $170 million in underlying earnings to the AXA Group French GAAP earnings. The strong emphasis on improving Life and Savings business mix toward more profitable products, higher assets under management boosted by third party assets net inflows, combined with tight expense discipline, should continue to underpin Life and Savings and Asset Management underlying earnings growth in 2005, albeit in a low interest rate environment.

“In Property and Casualty, management believes that, barring any major catastrophes, the growth momentum created by positive net inflows, productivity gains and underwriting discipline in a more contrasted rate environment should contribute to strong underlying earnings. In 2005, a more normal claims environment should also support International Insurance underlying earnings. In addition, barring any downturn in the financial markets, management also believes that AXA’s adjusted earnings should be progressively fuelled by stronger capital gains.”

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