AXA Reports Stable 2Q Earnings

AXA's revenues stable, but credit spreads hit income.

Alan Rambaldini | 13-08-08 | E-mail Article

On Wednesday, multiline insurer AXA (link will open in a new window) reported their first-half earnings, and after reviewing the results, we are sticking with our fair value estimate. Total revenues were stable, while net income declined mostly as a result of widening credit spreads. The property-casualty insurance operations led the way with a 20% increase in underlying earnings as the combined ratio improved to 96.4% from 98.3%. Revenue increases were highest in the Mediterranean region and the French market.

Underlying earnings in the Life and Savings divisions dropped 1%. Annual premium equivalent for the operation decreased in every geographical unit except for North Central and Eastern Europe. The decline was due to a number of factors specific to each region, and the firm's diversity should ensure this does not become a long-term trend. Assets under management at AllianceBernstein and AXA Investment Managers have fallen 7% from year-end 2007, with market depreciation and foreign exchange the main culprits. But the Asset Management division still grew underlying earnings 9%.

Alan Rambaldini is a European ETF Analyst for Morningstar. You can contact the author via this feedback form.
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