Net profit down in the half year for the French insurance group Axa, under the weight of extraordinary charges, while the technical performance is growing. In the first half of the year the group recorded a net result of 2,8 billion euros, down 14% compared to the same period of 2017 and slightly below analysts' expectations. Operating profit, on the other hand, increased by 4% (+9% at constant exchange rates) to 3,3 billion. Revenues totaled 53,6 billion, down 1% (+3% at constant exchange rates).
Il volume of new business is up 8% to 3,4 billion. The six-month period - explains Axa in a note - was affected by depreciation linked to the transformation of the collective life policy portfolio in Switzerland (-0,3 billion), the unfavorable change in the fair value of financial assets and derivative products as well as extraordinary expenses for the introduction on the Stock Exchange of the US subsidiary Equitable Holdings. Current RoE stands at 15,6%, up 0,9 points and the Solvency 2 index is up 28 basis points at 233%.
The group's operating result – underlines Axa – reflects “the good performance of all geographical areas, as well as the improvement of the technical results and the increase in management fees, partly offset by non-recurring tax elements”. More specifically, in France premium income increased by 8% to 13 billion, with an increase in new business of 19% and the harmonized non-life combined ratio improved by 0,6 points to 93,7%. The margin on new business is 30,7%, down 4,1 points and the value of new business increases by 5% to 0,3 billion. The operating result on the French market marks an increase of 9% to 816 million. In Europe, Axa underlines the "marked recovery in Italy". "We are very attentive to the Italian situation which has now stabilized more, after the volatility, which is never a friend of insurers, of the electoral period", commented CEO Thomas Buberl, asked about the Italian political situation during a telephone conference with the press, on the occasion of the half-yearly accounts.
In the European region as a whole, funding rose by 3% to 21,7 billion, with a particular push from the Peninsula, which marks an increase of 21% and with positive performance in the non-life business especially (+3%) in the United Kingdom and Ireland, in Switzerland and Germany and also in the health sector (+4%). The volume of new business is up by 6%, supported by the pension segment and highlights the trend of the Italian market (+22%), "thanks to the recovery seen at Mps with an increase in sales in the bank's agencies" . The harmonized combined ratio in non-life in Europe improves by 0,9 points to 93,9%. The operating result of the European region is up 10% at constant exchange rates (+7% at current exchange rates) to 1,27 billion, thanks to the improvement of technical margins in all activities.
In Asia, the harvest rises by 3%, mainly thanks to Hong Kong (+8%) and Japan (+3%), the volume of new business rises by 4%, the non-life combined ratio improves by 1,1 points to 96,5% and the operating result is up by 4% to 544 million. In the USA, where "the IPO of Equitable Holdings was successful", the life, savings and pensions sector recorded a volume of new business up 4%, while the value of new business fell by 3% to 0,2 .8 billion. For Ab, net inflows in the six months were negative by 11 billion, due to outflows from institutional customers and revenues from asset management increased by 1,3% to XNUMX billion.
US operating profit drops 18% (-8% at constant exchange rates) to 465 million. Among the other group entities, Axa Im reports net inflows of assets under management of 13 billion and average assets under management amount to 641 billion. Revenues amounted to 631 million (+5%) and the operating result grew by 10% to 139 million. Losses related to the fair value of the group's financial assets or derivatives amounted to 346 million (from 154 in the first half of 2017) and the reorganization of the life portfolio in Switzerland resulted in charges of 340 million.
