This site uses cookies

This site and its partners use technology such as cookies to personalise content and ads and analyse traffic. By using this site you agree to its privacy policy. You can change your mind and revisit your choices at anytime in future.

Last Modified: Thu, Feb 22 2018. 08 33 PM IST

Insurer AXA’s 2017 profit up ahead of IPO of US business

AXA posted higher-than-expected 2017 net profits and stronger earnings in the US, ahead of the planned flotation of its American life insurance and asset management businesses later this year

AXA reported earnings per share growth at the top of its targeted range of 3-7% a year over the 2016-2020 period. Photo: Reuters
Maya NikolaevaMatthieu Protard

Paris: French insurer AXA posted higher-than-expected 2017 net profits and stronger earnings in the United States, ahead of the planned flotation of its American life insurance and asset management businesses in the second quarter this year.

AXA, which ranks as Europe’s second-biggest insurer in terms of market capitalisation behind Germany’s Allianz, reported earnings per share growth at the top of its targeted range of 3-7% a year over the 2016-2020 period.

It said it had not been hit as hard as some of its rivals by a series of costly natural catastrophes in 2017, thanks to reinsurance contracts and its diversified business model.

AXA posted a 2017 net profit of €6.21 billion ($7.6 billion), while analysts had on average forecast net profit of 5.97 billion euros in a Reuters poll. The company proposed a 2017 dividend of €1.26 euros a share, up 9% and corresponding to a payout ratio of 49%. The dividend topped analysts’ estimates of €1.20.

AXA’s results came out better than those earlier this month from Allianz, with the German group reporting a worse than expected fourth-quarter net profit.

US flotation

AXA shares were flat in early session trading, but the stock nevertheless outperformed a weaker European insurance sector , as analysts welcomed AXA’s results.

“Overall these are good results with the dividend beat as the key positive,” wrote analysts at brokerage Keefe, Bruyette & Woods, which kept a “market perform” rating on AXA.

Faced with tighter regulations and declining investment returns, AXA is seeking growth in areas such as property and casualty insurance for businesses, savings products that do not tie up too much capital, health insurance and Asian operations.

“Health was our fastest growing business in 2017,” AXA said in a statement, adding it had for the first time crossed a 6 billion euros mark in terms of overall underlying earnings.

It plans to float its American life insurance and asset management businesses in order to free up capital and pursue takeover targets elsewhere. “We would reinvest funds in our privileged segments, such as health and protection, commercial business lines,” chief financial officer Gerald Harlin told journalists on a call.

“If we don’t have any opportunities, we could eventually proceed to share buy-backs,” he added. Reuters

Topics: AXAAXA resultsprofitAXA US IPOAXA shares

First Published: Thu, Feb 22 2018. 08 33 PM IST

Latest News »