AXA Q3 2024 $CS (-1,9 %)

Financial performance:

AXA reported a 7% increase in gross written premiums and other income to €84.0 billion for the first nine months of 2024. This growth was consistent across all segments, with premiums in property and casualty insurance rising by 7% to EUR 44.5 billion and in life and health insurance also by 7% to EUR 38.2 billion.

Balance sheet overview:

The Solvency II ratio was 221% as at September 30, 2024, a decrease of 6 points since June 30. This decline was attributed to unfavorable market conditions, in particular falling interest rates and rising spreads in Europe.

Details of the income statement:

Premium income in the life insurance segment rose by 7% to €25.1 billion, driven by strong growth in unit-linked products and capital-light G/A savings products. Health insurance also recorded a 7% increase in premiums to 13.2 billion euros, boosted by positive price effects in various regions.

Key figures and profitability metrics:

The New Business Value (NBV) margin decreased by 0.5 points to 4.6%, mainly due to a less favorable business structure and changes in financial assumptions. The Solvency II ratio, a key measure of financial strength, was stable at 221%.

Segment overview:

• Property and casualty insurance: Premiums increased by 7% to €44.5 billion, with strong growth in the commercial insurance and AXA XL reinsurance business lines.
• Life and Health: Life insurance premiums increased by 7% to €25.1 billion, while health insurance premiums also increased by 7% to €13.2 billion.
• Asset Management: Sales grew by 6%, driven by higher management fees.

Competitive position:

AXA's diversified business model and strong market position in core markets contribute to stable results. Moody's upgraded the Group's rating outlook to "positive", confirming the company's financial strength.

Outlook and management statements:

The Group expects to continue its strong operating performance and is confident of achieving the targeted underlying earnings per share growth for 2024 within the target range of 6-8% CAGR for the period 2023-2026.

Risks and opportunities:

The decline in the Solvency II ratio highlights potential risks from market volatility. At the same time, the strong sales growth and the strategic focus on high-quality business areas offer significant growth opportunities.

Summary:

AXA shows a robust financial performance with sales growth of 7% in all segments. Despite market distortions, the balance sheet remains strong with a Solvency II ratio of 221%. Strategic initiatives in the areas of pricing and product offensive contributed to growth, particularly in the Life & Health and Property & Casualty segments. The outlook remains positive and the company expects sustainable profit growth in line with its long-term targets.

Positive aspects:

• Sales growth: AXA recorded a 7% increase in gross written premiums and other revenues, reaching €84.0 billion for the first nine months of 2024. This growth was evident in all segments and underlines the successful implementation of the growth strategy.
• High-performing Life & Health segment: Premiums in the life insurance segment rose by 7% to €25.1 billion, boosted by strong demand for unit-linked products and capital-light G/A savings products. Health insurance premiums also increased by 7% to 13.2 billion euros, supported by favorable price effects in various regions.
• Growth in Asset Management: Asset Management income increased by 6%, driven by higher management fees thanks to an increase in average assets under management as well as higher performance fees.
• Strong market position: AXA's diversified business model and leading market position in key markets have contributed to consistent results. Moody's confirmed the company's financial strength and raised the Group's outlook to "positive".
• Strategic initiatives: The company successfully implemented targeted pricing measures and improvements in customer loyalty, resulting in sales increases in all business areas and regions.

Negative aspects:

• Decrease in Solvency II ratio: The Solvency II ratio fell by 6 points to 221% as at September 30, 2024, impacted by unfavorable market conditions, including falling interest rates and widening spreads in Europe.
• Decline in the NBV margin: The New Business Value (NBV) margin fell by 0.5 points to 4.6%, due to a less favorable business structure and changes in financial assumptions.
• Negative net inflows in Asset Management: Despite overall growth, Asset Management recorded a negative third-party net outflow of EUR -3 billion, partially offsetting positive inflows from AXA Insurance and Asian joint ventures.
• Challenges in the private customer segment: In the property and casualty segment, premiums in the personal lines segment were partly eroded by lower volumes in the UK, Ireland and Germany. This reflects measures to restore profitability.
• Risks due to market volatility: The decline in the Solvency II ratio indicates potential risks from market volatility that could affect future financial stability and performance.