AXA First-Half Profit Rose 22%, Led by Life & Savings Unit

August 1, 2014

AXA SA, France’s largest insurer, said first-half profit rose 22 percent, buoyed by improved earnings from selling life insurance and savings products.

Net income rose to €3 billion ($4 billion) from €2.47 billion [$3.3 billion] in the previous year, the Paris-based insurer said in a statement today. That beat the €2.7 billion [$3.6 billion] average estimate of six analysts compiled by Bloomberg. The shares rose as much as 3.2 percent in Paris trading.

“The effective implementation of our strategy has delivered strong earnings growth,” Chief Executive Officer Henri de Castries said in the statement.

AXA has disposed of €8.5 billion [$11.39 billion] of assets in developed markets since 2010 to invest in faster-growing nations from China to Colombia. The insurer is seeking to double operating profit from such markets in 2015 from 2010.

Adjusted return on equity, a measure of profitability, reached 16.8 percent in the first half, compared with the company’s target of 13 percent to 15 percent for 2015, AXA said. The insurer increased its cost savings target by €200 million [$268 million] to €1.9 billion [$2.54 billion] by 2015.

AXA sealed its purchase of a 50 percent stake in Shanghai- based Tian Ping in February to add about 4 million clients and sell auto insurance by phone or online nationwide in China, the world’s largest car market. In April, the French insurer completed the acquisition of a 51 percent stake in Colombian insurer Colpatria Seguros for €248 million [$332 million].

Operating Profit
Shares in AXA climbed 2.5 percent to €17.62 [$23.61] by 9:13 a.m. in Paris, trimming the decline this year to 13 percent. The 33-company Bloomberg Europe 500 Insurance Index rose 0.6 percent in 2014.

Operating profit, which excludes capital gains, one-time charges and variations in asset valuations, rose 8 percent to €2.78 billion [3.72 billion] in the first half. Operating earnings from life and savings, AXA’s biggest unit, rose 8 percent to €1.65 billion [$2.21 billion].

AXA’s property-and-casualty unit had a 9 percent increase in first-half operating profit to €1.23 billion [$1.64 billion], it said.

Born three decades ago from a combination of French mutual insurers, AXA has shifted more than 10 percent of its shareholders’ equity since 2008 to expand in emerging markets.

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