AXA first-half earnings fall, beat forecasts

City A.M. Reporter
Europe's second-largest insurer AXA reported a milder than expected 36 per cent drop in first-half profit from a year-ago period that had been boosted by a one-off gain from the sale of its Australia and New Zealand operations.

AXA said its net income for the period fell to €2.59bn (£2.03bn) from €4.01bn in the year-ago period. Analysts polled had forecast net income of €2.11bn.

Underlying profit rose 3 per cent to £2.305bn, bolstered by improved property and casualty results.

"The solidity of our first half results can be explained by the fact that our strategy for several years now has focused on market lines that are less market-sensitive: P&C, health and protection," chief financial officer Gerald Harlin said on a conference call with reporters.

AXA reported first-half revenue rose 1 per cent on a like-for-like basis to €48.4bn, with its life and savings business edging up 1 per cent, while P&C grew 4 per cent and asset management, including US-based unit Alliance Bernstein slumped 10 per cent.

Net inflows into protection and health and unit-linked products helped offset outflows in savings for the period.

The insurer's economic solvency ratio - a key measure of financial strength - fell to 174 per cent from 183 per cent a year ago, mainly as a result of lower interest rates, Harlin said.