Profit at insurer Axa plunges 66 per cent on write downs and natural catastrophes
Net profit at French insurer Axa plunged by two thirds last year which it blamed on charges related to its US arm’s initial public offering and a rash of natural disasters.
Net profit plunged 66 per cent from €6.2bn to €2.1bn for the year ended 31 December.
This was influenced by a €3bn write-down on the value of its US business Axa Equitable which listed in May at a price lower than its value in Axa’s books.
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It also had to write down costs related to its $15bn (£11.5bn) acquisition of Bermuda-headquartered insurer XL and the restructuring of its Swiss business.
Revenue rose to €102bn from €95.5bn, while combined ratio for its property and casualty units increased by 0.8 points to 97 per cent.
The company was hit by €2bn in natural disaster costs, with €600m in the fourth quarter connected to the California wildfires and hurricane Michael.
Axa XL, which it acquired last year, delivered a loss of €233m, compared to a consensus figure of €10m profit.
Analysts at UBS said Axa’s result represented “a solid set of numbers despite a weaker Axa XL result.”
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Chief executive Thomas Buberl said: “Axa delivered another year of strong operating performance with a six per cent increase in underlying earnings, to its highest ever reported level, even with a reduced ownership of Axa Equitable Holdings and an unusually severe fourth quarter in terms of natural catastrophes.”
Earlier this month German insurance giant Allianz unveiled operating profit of €11.5bn on the back of an improved expense ratio, lower claims from natural disasters and premium growth.