AXA’s Capital Buffers Beat Expectations as Q1 Sales Rise

AXA, Europe’s second-biggest insurance company, posted a better-than-expected key capital buffer measure in the first quarter, reassuring investors on its capacity to generate cash as it navigates a higher interest rate environment.

The group’s solvency II ratio – a measure of its capital strength under the EU risk-measurement rules for insurers – stood at 217% at end-March, up 2 percentage points versus end-2022, driven by strong operating return.

“Solvency was strong at 217%, better than consensus estimate of 208%,” said Morgan Stanley in a note.

KBW and Jefferies noted that the company’s new operating capital generation guidance for 2023, between 25 and 30 points for 2023, also beat market expectations.

AXA’s stock was up 2.2% at 1001 GMT, making it the second-best performer on France’s benchmark CAC 40 index .FCHI.

The insurer’s first quarter sales rose 2% from the same period a year earlier to 31.8 billion euros ($35.01 billion), as growth of its property and casualty policies offset a fall in revenue from savings products in France and Italy.

Revenue from property and casualty policies were up 5%, while life insurance policies fell, dragged down by a 9% drop in premiums in savings-related products.

The French insurer said it expected to yield more than 7.5 billion euros in underlying earnings this year, up from 6.1 billion euros in 2022, under new restated 2022 figures after the implementation of a new set of accounting standards.

AXA confirmed its 2023 financial targets.

($1 = 0.9084 euros)

(Reporting by Mathieu Rosemain and Matthieu Protard;Editing by Sudip Kar-Gupta, Kim Coghill and Emelia Sithole-Matarise)