AXA UK and Ireland earnings rise by 25 per cent

25 February 2016

Posted in Financial results

by Daniel O’Byrne (see media contact)

This morning AXA Group published its full year 2015 results. Key highlights from AXA UK and Ireland’s contribution1 include:

  • Underlying earnings up 25% to £312 million (2014: £250 million) – the fifth successive year of double digit earnings growth
  • General insurance and healthcare revenues up by 7% to £4.1 billion (2014: £3.8 billion) and by 5% on a comparable basis2
  • Underwriting profitability improved, with a 0.9pts improvement in the combined operating ratio3 to 97.1% (2014: 98.0%)
  • Profitability of the UK Life and Savings business, including AXA Wealth, SunLife and Architas more than doubled to £54 million (2014: £24 million), whilst assets under management and administration increased by +24% to £45 billion4 (2014: £36 billion)
  • With these results, AXA UK & Ireland is proud to confirm that each of its commitments to the AXA Group’s ‘Ambition AXA’ five year strategy, concluding in 2015, have been achieved

Commenting on the results, Paul Evans, AXA UK & Ireland Group Chief Executive said:

“I am delighted that we have been able to deliver impressive revenue growth without compromising profitability. Despite challenging market conditions, we have grown our personal lines and commercial lines revenues by 5% (to £2.1 billion) and 9% (to £2.0 billion) respectively. This represents an outstanding conclusion to the ‘Ambition AXA’ five year plan, with all targets achieved.

“UK direct motor revenues increased by 12% to £0.4 billion at a combined ratio of 91.4% thanks to both rate increases, and an 8% increase to one million direct motor policies in the UK. Total motor revenues increased 11% to £0.9 billion due in part to premium increases of over 30% in the Republic of Ireland to reflect the material increases seen in Court awards for personal injury. We call on the Irish Government to guide the Courts with a schedule of capped, consistent, injury awards which secures affordable insurance for motorists in Ireland.

“The market for Home insurance remains extremely competitive and total revenues fell 3% to £0.4 billion in 2015 at a combined ratio of 98.7%. Across our retail and commercial customers, we anticipate the cost of the December floods will reach £80 million, and are proud to have received very positive feedback from many of those customers we are helping to recover from the awful aftermath. AXA has already paid out over £10 million in interim and emergency payments, settled nearly 200 claims and placed approximately 500 customers in alternative accommodation as a result of storms Desmond, Eva and Frank.

“AXA recognises the need to continuously improve transparency so as to earn the trust of our customers. In 2015, AXA was the first insurer to remind customers of the previous year’s price with the renewal notice, the first to publish the proportion of claims which are accepted across Motor, Home and Travel with clear explanation of the common causes for claims being rejected, and now publishes unfettered customer feedback on both the buying and claiming experience.  We are very proud to have secured Feefo5 ‘Gold Trusted Merchant’ status for its five-star rated online customer reviews.

“The successful acquisition of the SimplyHealth private medical insurance business further strengthens the breadth of health and well-being solutions available to our commercial and retail customers, and builds upon an excellent healthcare business which has once again grown its retail customer base in an otherwise contracting market thanks to outstanding customer service. Overall, healthcare revenues increased by 15% to £1.4 billion and the combined ratio for the health business was 95.7%.

“Despite increasingly soft market conditions, UK Commercial Lines revenues (excluding healthcare) increased 3% to £1.1 billion at a combined operating ratio of 95.3%. The main highlights include excellent growth in the SME market via AXA’s commercial intermediary branch network where we have grown 8% each year over the five year plan period and the successful expansion into the higher premium, mid-market segment. AXA’s Commercial Direct business continued to deliver double digit revenue growth and increased its customer base by 26% in 2015.

“The Annual Premium Equivalent of new UK Life and Savings business increased by 27%, thanks in part to a 16% increase in individual pension sales, following introduction of the new pensions freedoms, and to a 75% increase in Corporate Pensions Investment business. Customer investments administered on the Elevate wrap platform increased by 14% to £10.5 billion.

“The progress that we have made under Ambition AXA’s five year strategy has ensured that AXA UK & Ireland is now on a very strong footing to capture market opportunities.”

1 The AXA Group results announcement includes the UK Direct results within the Direct Segment, and excludes those results from the UK & Ireland segment. This press release aggregates these segments as in prior years.

2 At constant exchange rates, and excluding movements in AXA Group Pool revenues, the transfer of warranty business to AXA France, and the acquisition of the PMI portfolio of SimplyHealth.

3 The combined operating ratio includes the benefit of £39 million release from prior year claim reserves (2014: £24 million benefit).

4 Architas assets under management increased 46% to £20 billion thanks to its international development, and AXA Wealth assets under administration increased by 13% to £32 billion, of which £7 billion is managed by Architas.

5 Feefo is a ratings and reviews platform, providing consumers with feedback ratings and providing companies with an independent service that is generated from real consumers.