A reduced earnings target for 2020 and a decision not to make additional payouts to shareholders during the fourth quarter – those were the headline takeaways as Europe’s second largest insurer AXA released its interim financial results today.
The company saw underlying earnings drop by 48% and gross revenues slip by 10% leaving it with net income of 1.429 billion euros (around $1.69 billion) – a 39% fall from the same period last year when it recorded 2.333 billion euros (around $2.77 billion) in net income.
The revenue slip can largely be attributed to the impact of COVID-19, with revenues actually rising by 4% in the first quarter, before dropping back 10% in the second quarter. Underlying earnings came in at 1.9 billion euros (around $2.25 billion), with property and casualty suffering a 72% fall, again largely on the back of coronavirus-related claims. Life and savings, meanwhile, slipped 9% but health enjoyed a 7% climb.
All of this has led the firm to withdraw its Ambition 2020 underlying earnings per share and adjusted return on equity targets.
“AXA’s strategic vision and business profile shift are more relevant than ever, notably with its growing and profitable health business, and an unparalleled opportunity to benefit from the hardening pricing cycle in P&C commercial lines,” said CEO Thomas Buberl. “With a clear focus on technical risks, the group is well positioned for a prolonged period of low interest rates.”
