Profits boost for AXA
RESTRUCTURING in the UK business of international insurance gaint AXA continued to pay off it emerged yesterday as the group posted strong annual results for 2005.
RESTRUCTURING in the UK business of international insurance gaint AXA continued to pay off it emerged yesterday as the group posted strong annual results for 2005.
Globally, AXA reported a 24% increase in underlying earnings to 3.3billion euros (about £2.2million), a performance matched in the UK and Ireland where underlying earnings grew by 23% to £266 million, continuing the trend established in 2004.
Revenues in general and health insurance in the UK and Ireland increased by 1% to £3.018billion, reflecting particular a strong performance in personal property (up 13%) and a growth in commercial property (up 2%), although revenues decreased in motor (down 5%) mainly in the competitive Irish market.
UK health revenues also grew strongly, by 9% to £824 million, due to new business gains, higher average premiums and the successful launch of new products.
Underlying UK earnings from general and health insurance increased by 33% to £273 million, with a “significant” improvement in claims costs in UK general insurance being partially offset by higher consolidated expenses as a result of changes in business mix.
In life and savings business, annualised premium earnings were 16% higher at £559 million - driven by 21% growth through the Independent Financial Adviser channel - and underlying earnings were maintained at £58 million.
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Dennis Holt, AXA UK group chief executive, said: “In 2005 we have reaped the benefits of investment in the restructure of our UK businesses, successfully growing market share through product enhancement and quality customer service.
“In 2006 we continue to focus on profitable growth. To win in a challenging competitive environment, we shall maintain our underwriting discipline, keep a firm control of costs and build on our strong market positions in investment, life, general and health insurance businesses.
“We shall also continue to deliver improved services that add value for customers by harnessing synergies across our businesses,” he added.
The AXA board is proposing a dividend for 2005 of 0.88 euros per share, an increase of 44% on 2004.
AXA group chief executive Henri de Castries said yesterday: “Significant value has been created in 2005 for our shareholders, as demonstrated by the record performance achieved this year.
“Our company-wide project Ambition 2012 was launched in 2005, establishing the objective of becoming the preferred company in our industry through customer satisfaction.
“We believe that we can achieve our 2012 goals by differentiating ourselves through employee engagement, a superior product offering, and excellent distribution. AXA's 2005 results show that we are off to a good start in meeting these aspirational objectives.”
