France’s AXA Group reported significant earnings increases in all of its business sectors for the first half of 2007, led by a net income gain of 16 percent to €3.2 billion ($4.372 billion). The growth figures, however, are decreased somewhat when calculated “on a comparable basis” – i.e. accounting for the recent strength of the Euro against the dollar and Japanese Yen.
On that basis the growth in net income would be around 10 percent; it also exclude’s AXA’s purchase of the Winterthur operations from Credit Suisse (See IJ web site June 14, 2006). Underlying earnings “were up 29 percent €2.7 billion [$3.69 billion], or +19 percent excluding Winterthur and at constant exchange rates, with a positive contribution from all business lines,” said the bulletin. Adjusted earnings reached €3.4 billion ($$4.65 billion], up +21 percent, or +14 percent excluding Winterthur and at constant exchange rates, “including €736 million [$1 billion] capital gains consistent with the yearly target range.”
Other highlights cited in the report include the following:
— Life & Savings businesses delivered solid growth in 1H07, with new business APE1 up 28 percent to €3.877 billion [$5.3 billion], or up 11 percent on a comparable basis.
— New Business Value2 was up 21 percent to €851 million [$1.16 billion], or up 9 percent on a comparable basis. The NBV margin stood at 21.9 percent, down 0.5 pt on a comparable basis, the overall improvement in business mix (+0.7 pt) being more than offset by an adverse evolution in the country mix (-1.2 pts).
— Property & Casualty revenues increased by 33 percent to €14.195 billion [$19.4 billion], or +4 percent on a comparable basis in the context of a softening market. The combined ratio was 98.4 percent, up 1.4 pts on a reported basis including 2.8 pts (€339 million[$463 million]) related to European Windstorm “Kyrill” and UK June floods, partly offset by positive developments on prior accident years.
— Asset Management revenues increased by 15 percent to €2.407 billion [$3.288 billion], or up 22 percent on a comparable basis, with very strong net inflows of €33 billion [$45 billion]. Underlying cost income ratio was 67.6 percent, improving by 1.4 pts compared to 1H06.
“AXA has delivered in 1H07 strong numbers again following a very good year in 2006”, noted Henri de Castries, Management Board Chairman. “Revenues, underlying and adjusted earnings grew by more than 20 percent on a reported basis, as a result of continued organic growth and Winterthur contribution. I am convinced that our business model will continue to prove its efficiency, including in a more challenging environment, and I remain confident that we will continue to deliver according to our Ambition 2012 plan.”
The full report and related information may be obtained on the Group web site at: www.axa.com.
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