“Although COVID-19 related claims notified in March were limited and the precise implications of the crisis remain uncertain at this stage, we believe that the effects of the COVID-19 crisis will have a material impact on our earnings in 2020.”
Those were the words of AXA chief executive Thomas Buberl when the Paris-headquartered insurer published its first quarter activity indicators, which include gross revenues of €31.7 billion (around CA$48.2 billion).
The figure represents a 4% increase on a comparable basis (constant forex, scope, and methodology) and a 9% decline on a reported basis. Broken down into geographies, here are AXA’s revenue numbers:
Meanwhile the group’s Solvency II ratio went down 16 points from where it stood on December 31, 2019, to 182% as of March 31, 2020. The drop was largely attributed to unfavourable market conditions.
As for the pandemic’s effect on claims, AXA noted: “Claims notified related to COVID-19 in March have been limited at this early stage. However, confinement measures across all geographies are expected to have a material impact on the level of claims across a number of product lines, most notably in event cancellation and business interruption.
“For event cancellation, a preliminary estimate for the total potential claims related to COVID-19 is in the mid triple-digit million Euros, pre-tax and net of reinsurance. For business interruption, with limited claims notified to date, it is too early to make an estimate of the level of potential claims.”
AXA added that certain other lines such as directors’ & officers’, liability, and travel may also take a hit but likely to a lesser extent. In credit insurance and mortality claims, no material deviation has been observed so far.
“The COVID-19 crisis has created unprecedented health, economic, and financial challenges,” stated Buberl. “AXA’s priority has been to protect the safety of our 160,000 employees and partners and allow them, as well as our distributors, to continue providing undisrupted services to our 108 million customers. Exceptional measures have been implemented to help our most impacted clients, particularly SMEs.”
According to the insurance boss, the company has also leveraged its medical networks and teleconsulting services for its clients while at the same time supporting medical responses in the regions in which AXA operates.
“We have contributed to solidarity funds to support healthcare professionals, research, affected companies, and economic recovery,” said the CEO. “AXA has initiated discussions with peers and public authorities to better insure future health risks.”
