Axa sales rise – but warns over interest rates

 
City A.M. Reporter
Europe's second-biggest insurer AXA posted a 3.5 per cent rise in nine-month sales, driven by emerging markets, but warned a decline in interest rates would hurt year-end profitability.

European insurers such as AXA and bigger rival Allianz are under threat from falling government bond yields, which have the potential to squeeze earnings below guaranteed returns, some analysts say.

AXA said nine-month sales rose 3.5 per cent, to 70.5bn euros (£61.59bn), up from 68.1bn a year ago.

"Ongoing active measures to improve margins in selected areas continued to bear fruit in the third quarter...But the decline in interest rates is expected to affect new business margins as measured at year-end," Chief Executive Henri de Castries said in the statement on Thursday.

Life and savings new business sales on an annual premium equivalent basis – an industry measure used to iron out market volatility – rose 2.8 per cent, to 4.6bn euros, thanks to strong performances in Latin America and Asia.

Property and casualty revenue, meanwhile, rose 4.2 per cent, to 21.4bn, AXA said in a statement Thursday.