One of the leading insurance companies in the world, AXA, has not been immune to the declining investment returns that have rocked the industry across Europe.
Incoming CEO Thomas Buberl has outlined his strategic plan for the French insurer – and this has included an announcement of lower earnings growth expectations for the coming years.
As yields fall on its investments, AXA is now aiming at increasing earnings per share by three-seven per cent on an annual basis in 2016-2020 – that’s a fall from its target of five-10 per cent for the last five years.
Instead the company is looking to grow in areas such as property and casualty insurance for businesses, as well as savings products that could tie up capital and operations across Asia.
In a statement the company noted: “These initiatives will position AXA to grow earnings and increase dividends, even in a context of continued low interest rates.”
The firm has forecast a 12-14 per cent return on equity for 2016-2020 – that compares to a 13-15 per cent target during the previous plan. According to Gerald Harlin, the company’s chief financial officer, the plan is “realistic”. It will also include a target for two billion pounds of cost savings by 2020.
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