Earnings recovery in 1H09 versus 2H08:
- Underlying Earnings: Euro 2,116 million down 26% yoy, up 63% sequentially
- Adjusted Earnings: Euro 1,736 million down 50% yoy, up 327% sequentially
- Net Income: Euro 1,323 million down 38% yoy, up Euro 2,577 million sequentially
Confirmation of financial strength:
- Solvency I ratio: 133% up 6 pts vs. December 31, 2008
- Shareholders’ equity: Euro 38.8 billion up Euro 1.4 billion vs. December 31, 2008
- Debt gearing: 31% down 3 pts vs. December 31, 2008
Overall resilient customer base:
- Revenues: Euro 48.4 billion down 1.8% yoy (down 5.7% on a comparable basis)
- Positive Insurance net inflows
- Assets under Management: Euro 967 billion down 1.5% vs. December 31, 2008
Strong management actions to weather the market turmoil:
- Focus on profitability in Property & Casualty and Life & Savings (Variable Annuities) through repricing measures
- Productivity efforts in all business lines
- Risk Management actions, notably in the US (stabilizing capital and improved Variable Annuity hedging margin)
Chairman’s statement
“Our confidence in AXA Group’s strategy is supported by the solid performance recorded during the first half of 2009, as well as the efficiency of the risk management actions undertaken to mitigate the consequences of the crisis”, said Henri de Castries Chairman of the AXA Management Board.
The insurance sector and AXA were not immune to the adverse market environment. However, the Group demonstrated its capacity to act quickly and to take the necessary actions in order to preserve a solid balance sheet, manage business efficiently and maintain the trust of our customers.
Going forward, we are prepared to withstand a further possible market downturn and we are well positioned to benefit from a market upturn: we have not stopped investing and focusing on our core business in a market with continuing growth potential.”
Revenues
- Total Revenues were down 6% to Euro 48,414 million.
- Life & Savings revenues were down 7% to Euro 30,065 million, in line with trends observed in 4Q08 and 1Q09, mostly due to the adverse market environment.
Net inflows remained positive at Euro +5.6 billion, flat on a comparable basis versus 1H08.
New Business Volume (APE1) was down 16% to Euro 3,111 million, with unit-linked share down from 48% to 40%.
New business margin was down 0.9 pt to 13.7%.
- Property & Casualty revenues increased by 1% to Euro 14,919 million, driven by Personal lines (+1%) while Commercial lines remained stable. Personal Net New contracts amounted to +695,000.
- Asset Management revenues were down 34% to Euro 1,503 million, due to 36% lower management fees mainly driven by lower average assets under management (-26%), unfavorable change in product mix, as well as the reduced contribution from distribution fees. Net outflows amounted to Euro -38 billion.
Earnings
1H09 earnings were significantly up versus 2H08: Underlying Earnings were up 63% to Euro 2,116 million, Adjusted Earnings were up 327% to Euro 1,736 million and Net Income was up Euro 2,577 million to Euro 1,323 million.
Compared to 1H08:
- Underlying Earnings were down 26% to Euro 2,116 million, mainly due to (i) lower average assets under management negatively impacting underlying earnings in both Life & Savings (down 16%) and Asset Management (down 42%), and (ii) combined ratio up 1.7pts to 98.0% (mostly related to natural events) impacting underlying earnings in Property & Casualty (down 12%).
- Adjusted Earnings were down Euro 1,640 million (-50%) to Euro 1,736 million, as a result of (i) Euro 714 million lower underlying earnings, (ii) Euro 614 million lower realized capital gains (mostly on equities), (iii) Euro 312 million higher impairments net of hedging (mostly on equities).
- Net Income was down Euro 821 million (-38%) to Euro 1,323 million as a result of (i) Euro 1,640 million lower adjusted earnings, partly offset by (ii) Euro 819 million lower negative contribution from change in value of assets and derivatives net of forex and other items, mainly due to credit spread tightening.
