AXA - Be Life Confident

In the UK & Ireland, underlying earnings of £160 million for H1 2007 were 3% ahead of H1 2006 levels at £156 million.

Total General² insurance revenues increased by 9% in H1 2007 to £1.86 billion (up from £1.71 billion in H1 2006) and were led by a strong growth in UK Health. Personal motor in the UK contributed to a £91 million growth in personal lines revenue, helped by the Swiftcover acquisition in February 2007, and its positive growth as an independent franchise. Increased competition in commercial casualty has caused premium volumes to be lower than anticipated, however AXA remains committed to maintaining underwriting discipline and offering premium terms that are viable.

The growth in UK Health revenues has been maintained (revenue up 13% in H1 2007 at £537 million from £476 million at H1 2006) with significant volume growth across the majority of business lines, supported by innovative product development, higher direct sales and our successful partnership with Tesco.

In Ireland, general insurance revenues were down (-6% at €239 million in H1 2007 against €254 million for H1 2006) reflecting lower average premiums although the number of policies has increased by 2% at the end of June 2007 compared to the end of 2006, from approximately 727,000 to 742,000.

Total General and Health insurance underlying earnings decreased from £124 million in H1 2006 to £83 million in H1 2007 (excluding the earnings of general insurance brokers) which was brought about by two adverse weather events - storms in January and flooding in June (combined total £115 million before tax). The impact of the two weather events has contributed to a deterioration in the general and health combined ratio from 96.7% for H1 2006 to 102.4% in H1 2007. Excluding the impact of these major claims incidents, the general and health combined ratio for H1 2007 would have been 95.5%.

In Life & Savings business, which includes the wealth management, corporate and protection business units, APE was up 69% to £553 million in H1 2007. On a like for like basis (including appropriate figures for Winterthur), the increase in APE was 26% (up from £438 million in H1 2006). The overall improvement is largely due to the continued strength of AXA’s individual pensions offering, along with further worksite sales into existing accounts, the contribution from Winterthur’s wealth management business and higher than expected offshore bond business.

Including relevant figures for Winterthur, new business value (NBV) increased by 51% to £77³ million in H1 2007 from £51³ million for H1 2006. Excluding Thinc Group, underlying earnings of £97 million in H1 2007 improved by £42 million from H1 2006 helped by the growth in fees and revenue, one off tax benefits and improved with profit bonus payments.

Nicolas Moreau, group chief executive of AXA UK, commented, "It is very pleasing to be able to announce a set of results which show strong growth as well as an improved level of underlying earnings despite the destructive floods that we have seen during June. Our efforts are now focused on helping those customers who have been badly affected by these floods and by the more recent devastation seen in parts of the West Country.

"We have made good progress with our aspiration of becoming the trusted market leader, an objective I am absolutely committed to delivering. Over recent months we have moved the business forward very strongly as evidenced by our deliberate move into the distribution sector with acquisitions in the general, life and health sectors – we now operate the second-largest SME brokerage following the purchase of broking firm Smart & Cook in April 2007. I am excited by the coming launch of a range of innovative products and services, including Wrap and new enhancements to our wealth management proposition, including a new US style 'Accumulator' income drawdown facility with guarantees."

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