AXA UK and Ireland earnings rise by 32 per cent

Underlying earnings up 32 per cent to £178 million (2012: £134 million)

20 February 2014

Posted in Financial results

Financial Highlights

Underlying earnings up 32 per cent to £178 million (2012: £134 million)
General Insurance combined ratio¹ improved by 2.1pts to 98.1 per cent (2012: 100.2 per cent)
General Insurance revenues fell one per cent² to £3.7 billion (2012: £3.8 billion) due to disciplined underwriting
Wealth Management sales³ increased 53 per cent² to £4.5 billion, taking funds under management to £25.5 billion (31 December 2012: £21.6 billion).

Commenting on the results:

In 2010, AXA UK launched a business transformation to reposition our product offering to better serve the needs of both our customers and brokers whilst improving the cost efficiency of our operations. This transformation is progressing ahead of expectations, with underlying earnings increasing by 32 per cent to £178 million in 2013 thanks notably to significant improvements in profitability across Commercial and Personal Lines, and the Wealth Management business.

Paul Evans, Group Chief Executive at AXA UK & Ireland

General Insurance

The general insurance current year combined ratio¹ improved 2.1 points to 98.1 per cent. Improved profitability has been secured by maintaining pricing discipline in markets where premiums have fallen ahead of improved claims experience, particularly in Home and Motor. In Commercial Lines, revenues grew 11 per cent² - the third consecutive year of strong revenue growth – and in healthcare, revenues grew 8 per cent².

For the first eleven months of 2013, the UK experienced particularly benign weather, but the storm claims that followed during December returned the cost of weather events in 2013 towards the long term average assumed within pricing.

Commenting on the floods currently impacting the UK:

Handling the aftermath of dreadful events such as the current floods is exactly what we do. Providing excellent customer service to those affected is a priority for our business today and will remain so in the coming months until each of our customers has returned to their restored home. The immediate priority has been to get people into safe accommodation with the emergency cash they need to deal with any immediate necessities. Once the flood waters recede, we will be there over the coming months to help our customers rebuild their lives and return to their homes as soon as possible.

Paul Evans, Group Chief Executive at AXA UK & Ireland

Wealth Management

AXA Wealth has had a very successful year, leveraging the advantaged positioning of its platform propositions in anticipation of the enormous regulatory change launched at the beginning of 2013. Total sales³ increased 53 per cent² to £4.5 billion, taking total funds under management to £25.5 billion (31 December 2012: £21.6 billion). Business placed by IFAs on the Elevate wrap platform increased by 60 per cent to £2 billion, bringing funds administered by the platform to £7.5 billion, an increase of 41 per cent. Architas, AXA’s multi-manager fund management business increased funds under management by 13 per cent to £12.8 billion.

In the post-RDR world, a growing number of consumers either can no longer afford to access advice, or don’t wish to pay for it. It is with this in mind that we developed our AXA Self Investor platform as an easy and cost-effective online investment solution, providing consumers with the tools to understand their own appetite for financial risk and to select and invest in an appropriate investment fund. We are also investing £120,000 through the AXA Research Fund into research at the London School of Economics which will consider how common individual behaviours drive consumers to make bad financial decisions, or indeed no financial decisions at all, leading to worse financial outcomes. This research will both guide the development of our own consumer propositions and inform the wider debate on the role of financial advice.

Paul Evans, Group Chief Executive at AXA UK & Ireland

Paul Evans, concluded:

Over the past three years, AXA UK has made remarkable progress in its delivery for both customers and distribution partners, in its operational efficiency and overall profitability and I remain confident that our businesses are very well placed for profitable growth.

Paul Evans, Group Chief Executive at AXA UK

¹ Current year combined ratio excludes net strengthening of prior year reserves. The All year combined ratio improved 2.3pts to 98.9 per cent (2012: 101.2 per cent)

² On a consistent and continuing scope, and at constant exchange rates

³ Wealth management sales are the investments made by new or existing customers that are administered by AXA Wealth

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Legal notes

About AXA UK

AXA Insurance UK plc registered in England and Wales under registered number 078950 and authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority under Financial Conduct Authority registration number 202312. Registered office is 20 Gracechurch Street, London, EC3V 0BG.

AXA UK is part of the AXA Group, a worldwide leader in insurance and asset management, with 147,000 employees serving 94 million clients in 50 countries. In 2023, IFRS revenues amounted to Euro 102.7 billion and underlying earnings to Euro 7.6 billion. AXA had Euro 844 billion in assets under management as of December 31, 2023.

In the UK & Ireland, AXA operates through a number of business units including: AXA Insurance, AXA Health and AXA Ireland. AXA UK & Ireland employs around 10,000 staff.

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Certain statements contained herein may be forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans, expectations or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause AXA’s actual results to differ materially from those expressed or implied in such forward looking statements. Please refer to Part 5: “Risk Factors and Risk Management” of AXA’s Universal Registration Document 2022, for a description of certain important factors, risks and uncertainties that may affect AXA’s business and / or results of operations. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise, except as required by applicable laws and regulations.