Business

AXA earnings hit by £1.3bn in Covid claims

The group’s underlying earnings were down by 34%, however, impacted by £1.3bn in Covid-related claims

AXA has announced that earnings in its full-year results fell by 34% to €4.3bn (£3.7bn), down from the €6.5bn (£5.6bn) reported in 2019. This was largely due to paying out €1.5bn (£1.3bn) in Covid-19 related claims, as well as higher natural catastrophes in the period. 

Nonetheless, its full-year revenues were “resilient”, down just 1% against the previous year to €97bn (£84bn) despite the impact of the pandemic. According to the insurer, this reflects the “relevance” of its strategic choices and business mix in the period. 

At the same time, its preferred segments, P&C Commercial lines, Health and Protection, continued to perform well, up by 3% in 2020 and accelerating by 5% in the fourth quarter.

Revenues by business lines were up by 1% in Property and Casualty, with higher revenues in Commercial lines (2%) from strong price increases, notably at AXA XL. This was partly offset by lower revenues in Personal lines (-1%) primarily due to lower new business activity during the lockdown periods.

Health was up by 6% with growth across all lines and geographies, though Life and Savings was down by 6%.

In addition, its solvency II ratio at December 31st was 200%, up 20 points from September, including +13 points from the integration of AXA XL into the group’s internal model.

Looking ahead, the group said it is “confident” in its earnings outlook and has set a 2020 starting base of €6.3bn (£5.4bn) underlying earnings for its 2021 to 2023 strategic plan targets.

Thomas Buberl, CEO of AXA, said: “After carefully considering the group’s balance sheet position, cash flows and overall operational performance as well as the continuing uncertainties related to the ongoing Covid-19 crisis, the board of directors decided to propose a dividend of Euro 1.43 per share.

“I would like to thank all AXA colleagues, agents and partners for their unwavering commitment during these challenging times, as well as our clients for their loyalty and trust. Our strategy is aligned with the interests of all our stakeholders and firmly rooted in our purpose – ‘Acting for human progress by protecting what matters’.

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