AXA Profit Rises 10% in 2013 on Life, Property and Casualty
February 21, 2014 by Fabio Benedetti-Valentini
AXA SA, Europe’s second-largest insurer, posted a 10 percent increase in 2013 profit on higher earnings at its life and savings and property and casualty divisions.
Net income rose to €4.48 billion ($6.15 billion) from €4.06 billion [$5.568 billion] a year earlier, the Paris-based insurer said today. Earnings missed the €4.74 billion [$6.5 billion] average estimate of 16 analysts surveyed by Bloomberg as the company booked costs related to foreign-exchange hedges.
U.S. life insurance sales climbed as stock markets rose and the economy grew faster than France and the euro area. AXA, led by Chief Executive Officer Henri de Castries, has disposed of €8.5 billion [$11.658 billion] of assets in developed markets since 2010 to invest in faster-growing nations from China to Colombia as a sluggish economy weighs on European insurers’ revenue.
“There is a negative impact of forex and interest rate hedging,” said Raphael Caruso, a Paris-based analyst at Raymond James, who recommends buying the stock. “But globally their profitability had a clear improvement. The touchstone is the recovery in the U.S. unit-linked portfolios.”
AXA fell as much as 1.8 percent in Paris trading, and was 1.2 percent lower at €19.31 [$26.48] by 9:09 a.m. That trimmed gains over the past 12 months to 45 percent.
The insurer plans an 81 cent-a-share dividend for 2013, up from 72 cents the year before, matching analysts’ forecasts.
Adjusted return on equity, a measure of profitability, reached 14.8 percent last year, compared with the company’s target of 13 percent to 15 percent for 2015, AXA said.
“U.S. operations have enjoyed a very, very strong year but in Europe too we are starting to see gradually the benefits of the recovery,” de Castries said in a Bloomberg Television interview. Emerging markets remain “an area of the world in which we can enjoy strong growth and high margins” even if some of these economies are slowing down, he said.
–Editors: Frank Connelly, Jon Menon
