Axa: Analysts Gain Confidence as Operating Profit Rises

(Boursier.com) — Axa blowing back on the 27 euros on Tuesday, after a good sequence of increases in the wake of an operating profit of 4.1 billion euros in the first half, up 5% and a solvency ratio which increased by 20 points compared to the end of 2022. The group thus says it is on track to achieve its annual operating profit target. Axa said that at the end of June, its solvency II ratio was 235%, compared to 215% at the end of 2022. This ratio was 217% in the first quarter.

The insurer recorded over the first 6 months of the year a turnover (gross written premiums and other income) up by 2% to 55.7 billion euros, in the wake of strong growth in its technical business lines and taking advantage of a more favorable pricing environment for business and personal damage insurance premiums.

Underlining Axa’s ability to “maintain good quality results despite an uncertain environment”, the group’s chief executive Thomas Buberl said that he continued to “act to maintain its margins at a high level within of our various business lines”…”We are on track to achieve our operating profit target for the year, and are confident in our ability to generate revenue and profit growth over the long term”, said -he adds…

Strict disciplines

The insurer had indicated earlier this year that it was aiming for an operating profit of more than 7.5 billion euros in 2023, against 7.26 billion at the end of 2022… It intends to achieve this performance thanks in particular to its pricing measures and strict discipline. on costs, in a pricing environment that remains favorable in property and casualty insurance.
Over the January-June period, Axa’s premiums in damage insurance increased by 7% on an annual basis, to 30.4 billion euros. In health, life, savings and retirement, premiums declined by 3% compared to the same period last year.
In asset management, revenue fell 5% with lower management fees linked to the 4% drop in average assets under management due to unfavorable market effects. Axa recorded net outflows of 7 billion euros over the half-year.

Among the latest brokers’ opinions, SG adjusted the target from 33.5 to 34 euros with a buy notice, while Morgan Stanley raised its target from 35 to 36 euros (‘overweight’).