FREAK storms and floods in 2009 sent Axa’s UK year-end earnings tumbling by 18 per cent.
The firm’s underlying earnings decreased to £235m, from £288m in 2008. Commercial losses within its general insurance business totalled £157m.
Axa’s UK Property and Casualty arm was the worst hit, but reported strong revenue growth in personal motor and household insurance due to its focus on direct business.
Analysts said the results were not a surprise and that the UK’s long winter was to blame.
“Freezing conditions caused car accidents and building insurance was badly affected by burst pipelines,” said Rötger Franz, analyst at Société Generale. “This was followed by flood events in November and these natural catastrophes drove down earnings. Results will get better assuming next year is at a normal catastrophe level.”
There were some successes. The Life and Savings part of the business recorded strong new business growth – although wealth and corporate sales were down thanks to the recession. Healthcare’s revenue grew as a result of improved performance in international business.
Nicolas Moreau, group chief executive of Axa UK said: “2009 brought change at AXA .”
Global earnings were down six per cent to €3,854m compared to €4,044m in 2008.
This was a result of “fierce” pricing competition in the European motor business, said analysts.