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

by Jennifer Chilcott (see media contact)

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, Paul Evans, AXA UK & Ireland Group Chief Executive said:

“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.”

 

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, Mr Evans added:  

“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.”

 

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.  

Paul Evans added, “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, 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.”



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