2006
(28/02/2006) AXA UK reports 23% growth in underlying earnings in 2005
- Underlying earnings increased by 23% against 2004 to £266 million
- Adjusted earnings increased by 63% against 2004 to £319 million
- In General and Health Insurance, underwriting discipline contributed to revenues being maintained around 2004 level with a further improvement in combined ratio (by 1pt at 96.3%)
- In Life and Savings business, APE1 increased by 16% driven by significant growth in the IFA channel (up 21%)
Globally, AXA reported a very strong full-year 2005 performance with underlying earnings up 24% to Euro 3.3 billion and a proposed dividend for 2005 of Euro 0.88 per share, an increase of 44% on 2004. Group CEO Henri de Castries commented, "Significant value has been created in 2005 for our shareholders, as demonstrated by the record performance achieved this year. Our company-wide project Ambition 2012 was launched in 2005, establishing the objective of becoming the preferred company in our industry through customer satisfaction. We believe that we can achieve our 2012 goals by differentiating ourselves through employee engagement, a superior product offering, and excellent distribution. AXA's 2005 results show that we are off to a good start in meeting these aspirational objectives."
In the UK & Ireland, underlying earnings increased by 23% to £266 million, continuing the trend established in 2004.
In General and Health Insurance, revenues increased, on a comparable basis2, by 1% to £3,018 million in 2005. This reflects in particular a strong performance in personal property (up 13%) and a growth in commercial property (up 2%), while revenues decreased in motor (down 5%) mainly in the competitive Irish market, and in casualty commercial classes (down 6%) due to a continued focus on profitability. UK health revenues grew strongly by 9% to £824 million in 2005 due to new business gains, higher average premiums and the successful launch of new products.
General and Health Insurance underlying earnings increased by 33% to £273 million in 2005. This was driven by a strong underwriting performance with combined ratio down 1pt at 96.3% (well within the AXA Group target range of 96-101%) explained by significant improvements in claims costs in UK General Insurance partially offset by higher consolidated expenses as a result of changes in business mix.
In Life & Savings business, APE was 16% higher at £559 million in 2005. IFA sales improved by 21% to £480 million with investment bonds sales up 35% and group pensions up 18%. Underlying earnings were maintained at £58 million in 2005.
New business value increased by £14 million to £49 million3 in 2005 and the new business margin by 1.6pt to 8.8%4 mainly due to higher volumes and change in business mix towards more profitable business.
Dennis Holt, AXA UK Group Chief Executive commented,
"In 2005 we have reaped the benefits of investment in the restructure of our UK businesses, successfully growing market share through product enhancement and quality customer service.
"In 2006 we continue to focus on profitable growth. To win in a challenging competitive environment, we shall maintain our underwriting discipline, keep a firm control of costs and build on our strong market positions in Investment, Life, General and Health Insurance businesses. We shall also continue to deliver improved services that add value for customers by harnessing synergies across our businesses."
- Ends -
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Notes to Editors
1Annual Premium Equivalent equals to regular premiums + 10% of single premiums, consistent with AXA Group European Embedded Value (EEV) methodology
2Excluding the impact of the sale of AXA Direct portfolio in November 2004
3, 4On a EEV basis, net of tax
Adjusted and underlying earnings are non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies.
- Adjusted Earnings: Net income before the impact of exceptional operations, goodwill and related intangibles amortization/impairments, and profit or loss on financial assets under the fair value option and derivatives.
- Underlying Earnings: Adjusted earnings excluding net realized capital gains attributable to shareholders.
In addition to General, Health and Life businesses, the Group underlying and adjusted earnings quoted in this press release include "Centre" earnings essentially corresponding to financing costs.
About AXA
AXA is a world leader in financial protection. AXA's operations are diverse with major operations in Western Europe, North America and the Asia/Pacific area. AXA employs 120,000 staff and tied agents and, as of 31 December 2005, had € 1,064 billion in assets under management. AXA reported total IFRS revenues of € 72 billion and IFRS underlying earnings of € 3,258 million for the full year 2005. Our previous company performance is not a guide to how we may perform in the future.
AXA ordinary shares are listed on the Paris Stock Exchange; AXA American Depositary Shares (ADSs) are listed on the NYSE under the ticker symbol AXA.