France’s AXA Group posted strong gains for the first six months of 2006 with net earnings up 20 percent (18 percent at constant exchange rates) to €2.7 billion ($3.45 billion). Underlying earnings, which excludes such items as capital gains and losses, goodwill and one-off transactions, rose 19 percent (17 percent at constant exchange rates) to €2.1 billion ($2.68 billion).
Gross revenues from AXA’s P/C operations increased by 4 percent to €10.815 billion ($13.8 billion), “reflecting a good sales momentum in 2Q06,” said the bulletin. “The combined ratio improved 0.6 point to 96.9 percent with all entities positively contributing to this performance.
“Asset Management revenues increased by 31 percent to Euro 2.09 billion [$2.67 billion], with very strong net inflows of €39 billion [$49.8 billion]. Both AXA Investment Managers and AllianceBernstein improved their cost income ratios, reaching respectively 70.5 percent (down 5.2 points) and 70.0 percent (down 1.9 points).”
The earnings report notes that AXA’s “international insurance underlying earnings were down 39 percent to €64 million [$81.7 million], mainly due to the sale of all but a small part of its AXA RE division to Paris Re Holdings Limited (See IJ Website June 6). AXA noted that as a result “AXA RE’s contribution to underlying earnings in 1H06 (€4 million [$5.1 million]) corresponds mainly to the run-off of 2005 and previous year reserves.” The unit contributed €55 million ($70.2 million) to earnings in the first half of 2005.
However, AXA also indicated that “excluding AXA RE’s contribution in 1H05, International Insurance underlying earnings were up 32 percent. AXA Corporate Solutions Assurance underlying earnings were up 13 percent to €44 million [$56.2 million], mainly driven by increased revenues, while the combined ratio remained stable, at 100.5 percent. Other international activities underlying earnings increased by €10 million to €20 million [$12.76 to $25.5 million], notably reflecting the non-recurrence of 1H05 negative development on 2004 Florida hurricanes in AXA RE’s US run-off portfolio.”
AXA gave the following statement on its outlook for the remainder of the year. “After a strong 2005 performance, AXA delivered on its organic growth objectives in the first half of 2006, resulting in strong earnings growth in Life & Savings, Property & Casualty and Asset Management, ahead of AXA’s Ambition 2012 aspirational growth targets. Management believes that the Group is entering the second half of 2006 with good momentum in terms of revenues, combined ratio and new business value.
“A prolongation of the present financial market environment with moderately rising interest rates and favorable equity markets should remain positive for Life & Savings and Asset Management. In Property & Casualty, barring any major catastrophic event, and despite the less positive underwriting environment, the combined ratio should remain in line with first half 2006 level. First half realized capital gains exceed guidance for 2006. AXA’s continued strong organic growth focus, augmented by the earnings accretive pending acquisition of Winterthur, will enhance AXA’s long term capacity to successfully deliver an earnings growth per share in line with Ambition 2012.”
The full report and additional comments may be obtained on the Group’s Website at: www.axa.com. AXA will host two earnings presentations – one in Paris, today August 3, and one in London tomorrow, August 4. It gave the following details on accessing the conferences:
• Paris, August 3, 2006
The conference will be accessible through a live Webcast and a conference call. The Webcast will begin at 2 p.m. in Paris (8 a.m. in New York, 1 p.m. in London). A slide presentation will accompany the event. Please go to www.axa.com 10-15 minutes prior to the event to join the Webcast or to obtain investor material. The conference call access numbers are:
+44 (0)20 7162 0125 for Europe and +1 866 302 1699 for the US
Replay will be available on the following day only. Numbers are +44 (0)20 7031 4064 for the UK, +33 (0)1 70 99 35 29 for France and + 1 954 334 0342 for the U.S. Access code: 714127
• London, August 4, 2006
The conference will be accessible through a conference call in listen-only mode. The conference will begin at 11 a.m. in London (12 p.m. in Paris). The access number is +44 (0)20 7162 0025. Replay will be available on the following day only. Numbers are +44 (0)20 7031 4064 for the UK, +33; (0)1 70 99 35 29 for France and + 1 954 334 0342 for the U.S. Access code: 714131.
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