Well, good afternoon and welcome to AXA's First Half Results Presentation. A special thanks to those who have shown up in person, and welcome also to the people who are following us on the webcast. Presenting our results today will be our Group CEO, Thomas Buberl, our Group Deputy CEO, Frédéric de Courtois, and our CFO, Alban de Mailly Nesle. We also have in the room our CEO of France, Patrick Cohen, CEO of Europe and LatAm, Antimo Perretta, and CEO of AXA XL, Scott Gunter. After the presentation, there'll be a Q&A session. We'll first take questions from the room, and then we'll take questions from the webcast. With that, I pass on to Thomas.
Thank you, Anu, and good afternoon to all of you. Very happy to welcome you here in the room and on the webcast. As you have seen the half year 2022 is a great half year, and it shows that the strategy that we have chosen is delivering very strong results. As you remember over the last years, we have been very busy transforming the company from AXA being very much focused on financial risk at the time to today being a business model that is very focused on technical risk. Being a business model that is not following the cycle because we are very much in technical risks, commercial lines, health insurance, and most of you would agree that you would never give up your health insurance when there is a recession.
We are also today in a business model that requires much less capital than the traditional model that we used to follow did. The results that we show today is another proof that this new model is really delivering strong and a consistent performance over time. Because 11% underlying earnings per share growth is really a great achievement in a time where we certainly have seen a lot of movements around us. When we saw each other last time for the full year results versus today, we are in a different world. In addition to that, we have also materialized what we have said around our capital management strategy by announcing a EUR 1 billion share buyback.
This is very much in line with what we said around how we are interpreting and living financial discipline, but it's also a very clear insight into the operational performance of AXA and also into the very strong balance sheet. When we come to the very strong balance sheet, we have achieved a Solvency II ratio of 227%, a very high solvency ratio on a very solid balance sheet in an environment that is not easy to navigate. This pivot that I mentioned earlier, away from financial risk to technical risks, is certainly absolutely key in gaining the significant strengths on the balance sheet. We have also continued our engagement for society.
In particular, on the climate transition and our leadership in climate transition, we have continued our progress to reduce the carbon footprint of our investment portfolio along with the reduction targets that we have given. I hope you agree with me that the relevance of this topic has never been as important. Strong results following a continued focus on execution and certainly living up to the capital management policy that we have clearly stated. Going forward, we are committed to continue this journey, focusing on execution, delivering consistent results, remaining cash obsessed, and certainly delivering long-term value for our shareholder. If we go into the details. If the slide works. There we go. Let's start with the top line. The top line has grown 1% to EUR 55 billion.
When you look at the detail, it is clear that, we are focusing the top line on a very high quality revenue mix. Our aim is to privilege the growth in technical and fee-based business, and you've seen amazing results. We managed to grow 13% in the health insurance business, mainly driven by the strong development of our employee benefits franchise. We've grown our P&C Commercial lines business, and this is AXA XL but also, the business in Europe that have Commercial lines despite the fact that, it is a difficult environment. We've been very, very cautious and disciplined when it comes to our retail Asset Management business has also grown by 4%. It's important that this growth in Asset Management has in particular happened on the Alternative Platform, which is around real estate, around private credit.
Those businesses are not only technical and fee-based business, but most of them have corporate customers on the other side. You know as well as I do that in an environment, it is important to roll over your cost and claims increases through inflation into price increases, this is a much easier discussion with a corporate counterpart than it is sometimes with an individual counterpart. AXA, being more than 50% of its revenue in corporate customers, will help us going forward. When I talk about high quality revenue mix, I also talk about, and I need to talk about, what we have not done anymore and what we don't want to do anymore. You've seen that we have put the significant reduction of our net cat, natural catastrophe exposure, in AXA XL Reinsurance in place.
It is realized, Scott Gunter and his team have done it, which has led to a reduction of our gross written premium of -21%. We've also continued, in particular in Europe, under the leadership of Patrick Cohen and Antimo Perretta, to reduce the general account savings that we have and shift even more into capitalized business. Good growth of our revenue, but very much continued focus around a mix shift towards higher quality. When we then look at the bottom line, we see that the earnings have really grown strongly in a challenging period. Would like to draw your attention to the organic growth, which is 7%. 7% in a period in which we see many difficulties around us is a great achievement.
It's a great achievement because it has happened in a time in which we were all faced with inflationary pressure, in which we are all faced with much higher market volatility than we used to be. The focus on technical excellence, the focus on cost, and the immediate reaction when things shifted early on in February has really helped us to deliver these results and also shows you that the group is very diversified through its lines of business, through its geographical positions, and is a very complementary mix that can also absorb if there is a shock here or there. We've seen that France, Europe, and Asia have continued to be extremely sustainable and consistent when it comes to the earnings growth, and I'm very happy to see that AXA XL has continued to deliver a good performance.
This was not easy because as you've seen, AXA XL was the part of AXA that had the highest impact when it comes to the war in Ukraine. EUR 300 million hit from Ukraine, which was absorbed otherwise in the XL business and enabled XL to deliver EUR 700 million at half year. All of the earnings levers are working well, and the 11% underlying earnings per share growth is the result of this. I would like to come back to the question around capital management. Capital management has two aspects. Number one is the question: how can we improve our cash remittance? Two big milestones have been achieved in this last half year. One is we managed to strike an in-force deal in Germany. This is a disposal that comprises EUR 16 billion.
We've also managed to successfully complete the transformation of AXA SA, the holding company, into an internal reinsurer. The focus on this cash obsession will continue. We want to make sure that we are striking more in-force deals, and we are going into more detail in Frédéric's section. The second piece is around the question, how can we deploy excess cash in the best interest of our shareholders? We are committed to the discipline on cash deployment, and a very tangible proof of this is the announcement of the EUR 1 billion share buyback today. And you know that there is additional share buyback coming from the disposal of the German life book once this transaction has closed with the aim of compensating the earnings dilution. Going forward, we will remain exactly on the same journey.
We will remain very, very disciplined when it comes to capital management, and share buybacks will remain an ongoing part of our capital management toolkit. Let's look forward from here into the next months. We all know that we are in a different environment today. This environment is challenged by the consequences of a war in Ukraine, by disruption of global supply chains, and we see the effects every day. Higher inflation, more volatility. We have to ask ourselves, where is AXA positioned in this? AXA is well positioned in this environment because we've built a model that is resilient in this environment. Why is it resilient? I said it earlier. Our business profile is resilient to economic cycles. We are in the large majority in businesses that do not suffer from recession.
We are in businesses where we have counterparts that are mostly corporates, where you have the ability to price, and we are in businesses in which we are very strong leaders. We are the largest corporate insurer in the world. We are one of the largest health insurers in the world, and our position in Europe is very difficult to beat. This has certainly been seen already in the first half year. We managed to increase our commercial line pricing by, or commercial line premium by 4% with very favorable pricing. You've seen 13% increase on the health businesses. I mentioned earlier our very strong balance sheet. This gives us an extremely strong position to withstand potential market volatility that might still come. You've seen our solvency at 227%, a level that is extremely high.
You've seen that the rate sensitivity of our balance sheet is significantly reduced, and you've also seen, and we'll come back to it later, that we are confirming our reserve strengths in a very different environment around inflation. All of this will enable us to continue our capacity to generate high cash. I said earlier that it was important for us to react very quickly. When we saw inflation coming, we reacted immediately. We always try and price our contracts above inflation. In many of our areas, and in particular in the commercial business, we have achieved to do so. 5% P&C commercial line business pricing in the first half of the year across the entire portfolio, thereof 9% at AXA XL.
We started immediately to reduce our cost after the war broke out, and you've seen that we managed the first fruit of it, minus 2% on the non-commission expenses. As I mentioned earlier, we confirm today the strength of our reserves, even in an inflationary environment. It is important that AXA doesn't only remain solid and resilient as a business, but also reliable as an actor in society. Therefore, we want to continue our very strong focus on the climate transition because we believe that it is more than ever necessary to work on this, necessary to support in the current energy crisis. We've achieved roughly EUR 23 billion of investments in green investments as an investor. For us, engagement in climate transition doesn't only mean to invest differently, it also means to underwrite differently.
Therefore, we've also managed EUR 1.4 billion of premium in green business solutions as an insurer. I'm very pleased to present these results to you today. I'm very confident when I look forward, realizing that there are risks around us, but our business is extremely well positioned to look forward in a very positive way and to continue the journey that we are on, that we've been on for quite some time now. Thank you very much, and I now hand over to Frédéric de Courtois, who will go into some selected business areas. Thank you.
Good afternoon. Happy to be with you in London, and I'm very pleased with our results, very pleased with our direction of travel. I'd like now to spend some time with you with some of my key priorities. The first one, and without order of priority, the first one is in force. The second one is inflation. The third one, which is a question you often ask, is the impact of higher interest rates on our life and savings business. The fourth one is the quality of our investment portfolio. Moving to the next page on in force. In force was, is, and remains a priority. You have seen the disposal of the German book, and you know that the German book is a EUR 16 billion book.
As such, it's a good step on the objective, on the ambition that we have, which is to dispose EUR 30 billion-EUR 50 billion over the planned period. This book had an average guaranteed interest rate of 3.2%. I'd like to highlight a couple of points, and the first one is that this is a clean disposal, so we have no counterparty risk. The second one is that with the consideration of EUR 660 million, it's a very good price because it represents 18 times the result of our book. As you know, we intend to offset any dilution with the share buyback that we will do at the closing.
If I look at the next eighteen months, I can tell you based on the German process that the context remains positive. There is appetite for this kind of book, and we are continuing to work on other projects to achieve the targets that I have just mentioned. On the next page, which is obviously a priority and which is inflation, and this is a subject you all have in mind. I'd like to tell you more about how do we counterbalance the impact of inflation. The first priority for us is to continue to get the right level of pricing and technical margin. This is not new because we've done this over the past years, but obviously it is more challenging. You see on the left part of the page that we have three different dynamics.
The first part is AXA XL, for which we have achieved very good increase of prices. At renewal, we've achieved +9%, which translates into +7% for the entire book, and this is comfortably ahead of our loss trends, which we estimate today as at about 5%. We have an increased margin on this. The second block of business that we have always on P&C obviously is non-motor and non-XL. This is the business that we mainly have in Europe. On this, the vast majority of our book is indexed on some kind of indices. If I take two examples, the first one is on property, and usually we have indexation mechanism on the cost of construction.
Just to give you an example, at the end of June in France, this index was up by 8%. This is also the case for non-property business, and I would like to mention casualty and workers' comp. For these two businesses, we have also some kind of indexation either to the revenues of the client or to payrolls. On motor, the situation is different, and we have softer pricing, globally in Europe. Why do we have softer pricing? Because it reflects lower frequency in still very specific environment. Just to give you two figures, if I compare where we are compared to 2019, so to pre-COVID period, the frequencies in the first half of this year are still down by 9% and prices are up by 7%. You see that we have room there.
The good news is that what we start to see in some markets, and especially the ones where the margins were more stretched, and I mean the U.K. and Spain, we've started to see price increases over the past two months, which means that the market is disciplined. All of this is about price increase and indexation. What I like to make sure you understand is that even when we have indexation, we also have price increases in addition to this indexation. The whole story is to look at what the price indexation is, and again, on this, on the middle bucket, it's on most of our business. In addition to this, we don't hesitate to make price increases.
In addition to all of this, we continue to be extremely disciplined and double down on all actions that we have already implemented in the past to mitigate inflation. I mean, procurement and orientation. If I take the example of AXA France, for instance, AXA France is able every year to compensate 2% of higher inflation thanks to the work they are doing on claims, so procurement and orientation. All of this, and I'm still on the left side, to convince you that we are extremely focused on maintaining the underwriting and pricing margins with all the actions that I have just mentioned. Of course, the other big topic is about reserves.
On this, we've done a deep and granular review over the past month, including looking at all inflation drivers for each of our lines. You see here a flavor of this review we have done. Many of the inflation drivers are not directly linked to CPI. I mean, they are linked to social inflation, they are linked to medical inflation, and you know all of this, and this is what we show on the graph on the bottom right. I think you need to have four topics in mind. First, as I've just said, not all business lines are linked to the CPI inflation. If I look at our reserves, the long tail lines, which represent the biggest part of our reserves, are not linked to CPI.
They are linked, for instance, to social inflation. The second comment is that limits, policy limits and reinsurance matters a lot, especially for AXA XL. The third comment, and you know this, is that we've always had a cautious approach on our reserving, and this is what you see year after year on our favorable reserve development. The fourth point, and maybe the most important, is that we've taken a cautious approach on forward-looking inflation. We've also looked at various scenarios over the coming years. What I can tell you is that in all these scenarios, and after taking the impact of inflation into account, we have, we still have very significant excess reserves. All of this makes us very confident on the strength of our reserves.
If I look at the other impacts of inflation, of course, inflation has impact on costs. You see here that we've decreased non-comm expenses by 2% over one year, which I think is a good result in an inflation environment. We are continuing to work on this. Of course, the target that we had announced on cost reduction over the planned period was in a different context. Of course, the context has become more difficult. What I can tell you is that we are doubling down on controlling expenses. On the right side, we should also see the benefit of inflation, if I may say, or the indirect benefit of inflation, which is higher interest rates.
We already start to see the impact of this, and you see here that the reinvestment yield of our fixed income portfolio has significantly increased over the first half, and we expect it to continue to grow over the second half. Of course, it's a strong mitigant to the inflation impact. On my third topic, which is the impact of higher interest rates on our savings strategy. The important message is that our savings strategy does not change. We are often asked whether we are going to change our product mix, our strategy, and so on because interest rates increase. The answer is no. Our savings strategy doesn't change. We believe our strategy in the current context is very relevant, very relevant for our clients, very relevant for our shareholders, and we are confident on the risk around our in-force book.
First topic is there any change or do we see any change in our lapse experience, especially on general account? The answer is no. We have not seen any change in our lapse experience, which is an important topic. I think there are three reasons for this. The first one, I'll take the example of AXA France, is that the book yield remains competitive, especially compared to risk-free investments. The second reason is that the client have low incentive to lapse because we have a long-term value proposition. We have tax benefit for these products. We have inheritance benefits. We invest on the long-term basis, so our clients do not have strong incentive to surrender.
The last reason for this, which is not mentioned on the slide, is about our client base and our brand. This is something I'm saying often. Our client base is made of retail and affluent clients. They have two characteristics. They don't trade every day based on the interest rate level, and they trust the AXA brand. These clients are not high net worth clients who react because interest rates have increased by one percent. All of this helps to explain because we have not seen any change in our lapse experience. The second topic on this page is that we believe that on the new business, we have an attractive value proposition. We have an attractive value proposition based on two kinds of products now, unit-linked and maturity guarantee products.
On unit-linked, we continue to improve our products, and our products now include asset class like infrastructure, private equity, ESG funds, so our clients can find in our unit-linked products all what they want to find, and they're happy with this offer. If our clients are more risk-averse, they move to general account guarantee maturity product, which is a good value proposition for them, and which also for us has a much lower capital requirement than annual guarantees. If you look at the mix in AXA France, the mix of unit-linked and Eurocroissance in the total mix was 64% over the first six months, which is an increase of 9 points compared to last year, which shows that our value proposition remains extremely relevant in the current environment.
All of this leads to products which are capital light and to a good revenue growth. If you see what here on the bottom right, the revenue growth in unit-linked and Eurocroissance, the revenue growth was 14% in the first six months, so flat for unit-linked and doubling on Eurocroissance, which means that clients are happy with our value proposition. We believe that we have an attractive value proposition, and we don't plan to change this with higher interest rates. Moving to the fourth and last topic on the quality of our asset allocation. You know this of course. What I'd like to highlight is that we have a very high-quality asset allocation, and that our asset allocation over the past years has not materially changed in terms of quality.
If I look first on the fixed income portfolio, the fixed income portfolio quality, look at the rating, has been extremely stable over the past years, as you see it, over the past 5-6 years. The majority of our allocation is in the AA grading. We have a BB- allocation, which is only 2% of our portfolio. I'd like to highlight that we have a credit team at the group level in addition to Asset Management credit team. We have a double credit review, if I may say, which help explain the quality of our credit portfolio, and especially currently help us manage our exposure to cyclical industries. Middle of the slide, you see our exposure to listed equities and private equity.
You see that our exposure to listed equity, net of policyholder participation, net of tax, and net of hedge, is only EUR 2 billion, and this is a level on which we are extremely comfortable in the current market context. On private equity, we have an extremely diversified portfolio, less volatile, and extremely diversified across vintages with a low exposure to VC. On real assets, and especially real estate and infrastructure, and I will especially insist on real estate, we are extremely focused on prime assets and ESG-compliant assets, and it has already been the case, even more the case before. What we see today is that there is still strong demand for this kind of assets, and we expect this to remain, again, if we remain focused on prime assets and ESG-compliant assets.
It makes us confident that this asset class will deliver predictable long-term cash flows. Again, on our asset allocation, nothing to add. We believe, and we've seen it over the various crises, including the last one, we have a very resilient asset allocation. Last but not least, before giving the word to Alban, I like to highlight again the quality of our results. What is interesting is that we've increased the results in all our four business lines. This is an excellent performance. Thomas mentioned it, with a 7% organic growth of our result. If I look at P&C, we've increased by 4% with a very good combined ratio below 94%. Life and savings, with an increase of 7% and a very resilient NBV margin.
Increase of the health result, and Alban will come back to this, and still increase despite the market turmoil of Asset Management results. I've said it all. Alban, the floor is yours. Thank you.
Good afternoon to all. I'll try to be brief so that we have a bit of time for Q&A. I'll take you through our various lines of business, and I'll start with P&C. On P&C, we had revenue growth of 1%, with good growth in both commercial lines and in personal lines, and with a decrease in reinsurance revenues in line with our strategy, given the focus that we have on the decrease of our exposure to Nat Cat. If I start with commercial lines, in both France and Europe, we had growth of 6%. We had a very strong price momentum here, as explained by both Thomas and Frédéric. At XL, premiums were broadly flat with price increases of 9%.
Again, strong price momentum there. Reinsurance was down 20%. We had told you that we would reduce our cat exposure by 40% along the year. That has been done at each renewal of the first six months very regularly. Our cat exposure is now reduced by 40% on everything that we could reduce. Personal lines are up 3%. That's a mix of 2% on motor, and that's exclusively price effect, and 4% on non-motor, and that's half-half volumes and price effect, again, as we are increasing prices against inflation. Now, if I move to Combined Ratio. Our Combined Ratio is almost flat compared to last year, and at a very good level, 93.7%.
That's all the more remarkable as we had two headwinds in the first half. The first headwind is the fact that we didn't enjoy any longer the frequency benefits due to COVID in motor insurance that we had last year. The second headwind is the loss that we had linked to the war in Ukraine for EUR 300 million. Those two losses were not compensated by Nat Cat because the first half was not easier than the first half in 2021. You saw also that PYDs are stable at 2.5, 2.4 points. Where did we get the earnings to offset those two headwinds? From two areas, a focus on attritional profitability, and second, a focus on expenses.
We see that, you see that, our expense ratio is down 4.9 points in one year. Just a word on AXA XL. Its combined ratio improved by 0.3 points, as such, it managed to absorb the loss from Ukraine, and we still expect further improvement at AXA XL as we earn more prices. Moving to P&C profitability. On underwriting result, that's the same picture with almost a compensation of those two headwinds I've mentioned. Very good investment income across the board. That's due to various effects. The fact that we have some inflation-linked bonds that obviously had a better yield given the environment. Some better funds distribution, but also the start of higher interest rates that we start seeing in our investment income.
AXA XL earnings stood at EUR 688 million. Adjusted for FX, it's +1%. Again, a very good performance for AXA XL. If I move to life and savings revenues. We had a very good mix as protection, unit-linked, and capital light GA represented 90% of our revenues. We had a very solid performance in protection coming mainly from Asia and within Asia from Japan. Unit-linked and capital light GA were a bit down, but that's also because we had a high level of sales on those two kinds of products in first half 2021. Key items to highlight. The first one in France.
In France, unit-linked revenues are down by 12%, but that's exclusively due to a very large corporate contract that we had last year and that we did not replicate this year. Unit-linked for individual business is flat, so we are at the same level as last year, which was excellent. You know that we are also proposing a capital very light product, which is Eurocroissance, and this one has doubled between the first half of 2021 and the first half of 2022. Europe is down.
That's mainly driven by Italy, with the sales through our banking channel, which are down in a generally difficult context for the life business in Italy. Finally on Asia, we had an elevated level of sales of the capital light products in Japan that we didn't replicate this first half because of changes in FX. This product is more competitive in a different FX environment. Net flows, we are focused exactly on where we want to be, i.e., protections, unit-linked, and capital light GA. You see that traditional GA net flows are negative, and that does not include inforce actions. It is the sort of natural attrition of traditional GA that we have by focusing on other products. APE and NBV on the following slide, same picture.
Here we have also included health APE, sorry, as we do each time. Same picture in terms of mix with very good growth in protection and health. One thing to highlight, we have grown our group business proportionally more than our individual business, and you know that the NBV margin of our group business is generally slightly lower than for our individual business. Hence, the slight reduction of the NBV margin that stays at a very good level of 40.3% and NBV is flat. Life and savings profitability up 7% or 9% at constant scope. An excellent performance with every driver working well. I will just highlight two, the fees and revenues.
That's due to the very good sales of protection business that we had, notably in Japan, and resilient unit-linked fees in the first half of the year. Investment margin also up, we reached a level of 70 basis points, so significantly above the guidance that we had given for this plan of between 55 and 65. You will note the fact that the reinsurance transaction in Hong Kong and the Singapore disposal cost us 2 points of growth in terms of earnings. Moving to health revenues, so strongly up by 13%. Group business, as I said when I commented the slide on APEs, is strongly up by 21%. That's mostly due to AXA France international employee benefit offering with two very large contracts that we have in the U.S.
that gave us that significant growth. You can also see that on the individual side, premiums are up 6%, and that's due notably to strong price increases. You may remember that in Mexico last year, we had an increase in our combined ratio in health because of COVID cases. We took strong actions and increased prices, and that in particular is what you see here with the increase in individual business. Health profitability, I would say, only 2%. We had this time COVID losses in Japan. If I exclude those COVID losses in Japan, we would be at +8% growth in underlying earnings on the health side. Nothing more to comment on T his slide. Again, technical results and investment income are up. Moving to Asset Management.
Obviously, our assets under management have decreased. That was expected given the rise in spread, rise in interest rates, the widening of spreads, and the decrease in equity markets. That's EUR 86 billion. What is very important is the excellent net inflows that we had at EUR 14 billion coming from third parties and from our joint ventures in Asia and in particular in China. Those inflows from third parties went to both the Alts platform and the Core platform, Alts being our alternative business and Core, our liquid assets business. Very good performance commercially at Asset Management business. P&L Asset Management. gross revenues were up 4%.
You can see that the average management fee increases, and that's where you see the resilience of Asset Management business and the fact that we have both a Core platform, but also an alternative platform which has higher fees, which also has less volatility in its assets under management. Better management fees, therefore more revenues, good efforts on the expenses, and therefore cost-income ratio that is down 1 point, and overall underlying earnings that grow by 3% in a difficult environment. Those were the various lines of business. If I summarize now, that's what you saw at the beginning with Thomas' slide.
Underlying earnings at constant FX grow by 4%, but in reality, when you look at organic growth, which is what matters to us, it is +7%, again, at constant FX. We have -3% coming from the disposal that we had last year, such as the bank in Belgium, Greece, Singapore, et cetera. Very good performance organically. Now, when you look at the underlying earnings per share, which as you know for us are at current FX, they stand at a very good +11%, so 4% from earnings growth, 3% from favorable FX. That's obviously the strength of the U.S.
dollar, the Hong Kong dollar, and the Swiss franc, and 4% coming from capital management, i.e., the reduction in the number of shares coming from the buybacks that we did at the end of last year and at the beginning of this year. Net income stands at EUR 4.1 billion, which is a stable number if you adjust for FX compared to last year. Just a few points to highlight. The first one is we realized, I would say, our usual amount of capital gains at EUR 279 million. We had positive mark-to-market on some assets, notably private equity and some derivatives for hedging purposes.
The other item I want to highlight is the fact that we have fully written off the goodwill that we had on our financial participation in Reso-Garantia. That's EUR 144 million impact. That was for our P&L. Moving now to our balance sheet. You obviously know that in our OCI, we have our unrealized capital gains. Again, given the rise in interest rates and the spread widening, those unrealized capital gains were down by almost EUR 20 billion. That's the vast majority of that is fixed income. You obviously know that it has no impact on our profitability, as we don't realize those gains on fixed income. We hold those bonds to maturity. You also know that solvency-wise, higher interest rates is also positive.
Apart from this, share equity was up EUR 1.5 billion, and you have the various impacts on the slide. Nothing spectacular to comment. That leads us to a very good underlying ROE of 15.8%, above our target range of 13%-15%. Moving on to Solvency II. Up 10 points, and I will comment on the next slide where those 10 points come from. As regards the sensitivity of our solvency, you see that they are the same or very similar to what we had at Q1, and the interest rate sensitivity in particular is significantly lower than what we had last year, thanks to a tight monitoring of our duration gap. Moving to the next slide on where does that solvency creation come from.
Regulatory and model changes, that's mainly the change in Japan that I highlighted here six months ago. Normalized capital generation, that's EUR 3 billion at the upper end of our target range. Again, you will note that, as far as SCR is concerned, we don't need more capital for the growth of our business. That, again, is very important, and that's the focus that we've had on capital light products and on P&C Asset Management. economic variance, that's a mix of positive interest rates, negative on equity, on inflation, and on implied volatility. Finally, on dividend share buybacks. You have the accrued dividend based on the paid dividend, as always, and the share buybacks, you have both the last one that we did, EUR 4.5 billion, and the one that we are announcing today.
The 227% figure that we show is after taking into account this buyback. Moving to investments. Frédéric already mentioned that we invested at 2.4%. I remember that, again, six months ago, I told you it would be 2%. It's better than that. It's 2.4, obviously thanks to the higher interest rates. P&C yield is up to 2.9%, but that's the same comment as I gave you earlier, and the investment margin at 70 basis points that I already commented. Finally, on debt and rating. Our debt gearing stands at 26.9%. That's well within the range of 25%-28% that we have given ourselves.
You saw that we issued EUR 2.5 billion of debt and that we repaid an amount of Tier 2 and Tier 1 debt in the first half. One word on the ratings. On the financial strength rating, it was confirmed that AA- was equivalent by the rating agencies, but you probably have noted that the rating agencies improved AXA's issuer credit rating to A+, and that's due to the fact that AXA is now no longer a holding company only, but also a reinsurance company. With that, I will hand over back to Thomas for the conclusion.
Thank you, Alban. You've seen that, the group is in excellent shape. We are all very confident to deliver on our Driving Progress 2023 plan despite the challenging environment. Why? Because our business model is well equipped also for that next phase. Being a business model focused on technical business, which requires less capital, being very diversified, and certainly having pricing power in a market in which we are, having across the table to a large degree corporate customers. When you look at the different targets and where we are, +11% underlying earnings per share growth is well above the range that we have given over a three-year period of 3%-7%. We are confident to deliver at the high end of this range.
15.8% return on equity sits also very nicely slightly above the range of 13%-15%. 220%, 227% solvency, up 10% from year-end is also well above the 190% target that we've given us. Certainly, the EUR 5 billion-EUR 6 billion cash remittance on track for this year will certainly also contribute nicely to the over EUR 14 billion cumulative cash upstream between 2021 and 2023 that we have given. Our focus remains on discipline in execution, being very reactive, making sure that we are continuing this consistent delivery, and certainly making sure that we are maintaining financial discipline. Thank you very much, and we are now going to all your questions. Let's just start in the corner with Will.
Thanks very much. William Hardcastle, UBS. I guess helpful today on the reserves and particularly the comments made there regarding the deep dive. Just really trying to understand on the AXA XL, how much of the comfort is being provided by this ADC cover? Is there any way you can give us perhaps what proportion of that's consumed already? And then on the softer pricing on motor, I guess I'm just trying to corroborate what you're saying here. You're sort of saying that there's some early green shoots on some of this pricing. There's a frequency benefit, but there's inflationary pressures. Are we saying that on a written basis as of today would be fairly comfortable on stabilization but pressure on an earned basis, or is it still pressure near term before we can get to stabilization? Thank you.
Thanks, Will. I suggest the ADC question for Alban and the softer pricing one for Frédéric.
On the ADC, today the ADC is not touched. We have not reached yet the attachment point.
Frederic.
On motor, what I was trying to convey is that the market on motor prices has been pretty soft. Zero or slightly positive because the frequency benefits have been so big and are still significant that there is no pressure on the market to increase prices. However, as we've started to see some inflationary pressure, I'm expecting prices to increase also on motor.
Let's stay at the same table and move to Ashik.
Thank you and good afternoon, everyone. First of all, congratulations for good numbers in a tough environment.
Thank you.
Well done on that. Just a couple of questions. First of all, I mean, on XL, the Combined Ratio went down despite taking a big hit on Russia, Ukraine. Would be good to get some color as to what are the moving parts there. I mean, why from where does the attritional getting better? I think there is a bit of a expense element here as well. Would be good to get some color about what are the moving parts of the improvement. Just trying to understand the sustainability of this in the near term. Second thing is, I mean, you announced a big EUR 1 billion buyback, which has nothing to do with the offsetting the disposal impact, et cetera. This is like a proper buyback that you're doing for the first time.
I just want to understand what is the thinking process behind it? Is there a formula that we need to think about? What are the moving parts there? What sort of regulatory discussion did you had with regulator before announcing this buyback? Thank you.
Excellent. Thanks, Ashik, for your questions. Alban, I suggest you take the first one, and then I'll take the second one.
Thank you for your question, Ashik. On XL, it's a mix of different things. We had an improvement in the attritional loss ratio.
I think what has contributed more to the offsetting of Ukraine is the fact that there was a strong focus on expenses and the expense ratio at AXA XL is down by 1.3 points. You also had positive prior developments coming mostly from short tail lines and notably a Nat Cat that we had in the prior years. You also had very good investment income.
On the question on the share buyback. Michael, we still do that one because that seems to be an important one. I was confronted with a question this morning which was, "Hey, why do you do a share buyback if you have got good results?" Which I found interesting. No. It's clear that the share buyback, which is true, it's a share buyback that is not related to any earnings dilutions. It's relatively simple. I mean, as I said, the results are excellent. The business was performing well. We have got a very good outlook, and we are confident to deliver. In the question around how do we deploy capital?
We always said, look, it's important to fuel AXA's growth and to make sure we've got the necessary investments into digital and so on. Which we do. We invest about EUR 2 billion every year into the internal growth and digitalization of the company. However, we clearly said if there is excess cash and due to the fact that we've been much tougher and more obsessed on cash, there is more excess cash. We will apply also a very high financial discipline. This was the discussion that we had at the board. Which led to this EUR 1 billion share buyback because we clearly said, look, share buyback is and will be an ongoing tool of our toolbox.
When it comes to the regulator, and this has always been the case, we have got a very good and a very proactive relationship with our regulators. It goes without saying that, we have been speaking to our regulator, from early on. We have been discussing obviously stress tests with them to make them comfortable around this decision.
Thank you.
Michael?
I was going to ask the cheekiest question 'cause I was told you don't give guidance. You're so confident, I was thinking maybe you could give guidance today. The outlooks look so strong. If there's anything you can say about the 11% and how sustainable that is, that would be so lovely. And then the two more boring questions, one on B22. If I look at the slide B22, there's this P&C loss ratio, it gets worse everywhere. I’m not saying it necessarily means the underlying is worse, but every ratio is up.
I just wondered, and my interpretation, and I just wondered whether you could comment on that, is that you put all of the price increases into reserves, and I just wondered if you could comment on that. The other one is a question about guidance. 70 basis points is the margin in life, up from 67 or 68, depending on the period you choose. Can you say what it's going to go to? Thank you.
Three questions from Michael. I suggest I'll take the first one. Frédéric, you take the second one relating to B22. Alban, you take the third one around the guidance of 70 basis points. It is absolutely true that we are confident going forward, and the confidence comes very much from the fact that we have a model that is working well, that is, as such and that we have built a balance sheet that is extremely strong. This confidence will lead us to continue to do as well as we can. When you think about what is the indication of the first half of this year for the second half of the year, I would like to remind you about the general seasonality in our business.
Because when you look at what is the difference between the second half year relative to the first half year in every year of a normal P&C company, it is the natural events that are most likely happening in the second part of this year. That's where we are. We are trying to make all of what we have shown to you as sustainable as we can. We are fully aligned on this one. Frédéric, B22.
2022 loss ratios. A few comments on this. First, I come back to Alban's comment on cats because I was reading the Swiss Re report this morning on cat in the first half, which said that more or less, in short, cats losses had decreased by 20% over the first half. For us, cat losses have been stable compared to first half last year. Why so? Because we are more exposed to Europe and France, and that if you look at the cats over the first half, AXA XL has been better, but Europe has been worse. We had especially hail in France. Let's say globally, after this long introduction, globally cat is not an explanation of the evolution of the loss ratio. Actually, the main explanation is not that we've put everything in reserves.
The main explanation is about frequency benefits compared to last year. As Alban mentioned, we had extremely strong frequency benefit last year, especially on motor. We still have frequency benefits this first half. Much lower. The order of magnitude of the difference is EUR 300 million. So we have EUR 300 million less frequency benefit in the first half compared to last year. If you look, I'd like to highlight this because there have been quite a lot of discussion first days on motor. If you look at the evolution of our motor business, the motor business claims ratio has worsened, if I may say, by 3.8%, which is what you see on this page.
As we've globally increased expenses, the Combined Ratio has increased by about 3 points or 3-3.5, which is something of course, but which is not dramatic. This is just the fact that the frequency is coming back to higher level, even if, as I said, it's still significantly lower compared to pre-COVID. I say a last word before giving the word to Alban on inflation, and I'm sure you will have other questions on this, but we haven't seen a material impact of inflation during the first half. Let's rediscuss because I'm sure you will have other questions.
On the 70 basis points margin on the investment margin on the life side. First, Thomas alluded to seasonality. There is a seasonality in the investment margin because in the first half you get dividends, for instance, that you don't get on the second half. That's the first point. Second, I think, we had good fund distribution as I said. Interest rates are higher. Obviously, we'll manage policyholders' participation going forward, but I see the 70 basis points as a high level, and I don't expect that to grow further.
Let's go to Andy.
Thanks. Andrew Sinclair from Bank of America. Three from me, please. Firstly, just on the Russia-Ukraine, EUR 0.3 billion exposure. Just really wondering if you can give us a little bit more color now we're a little bit further down the line and actually getting the numbers out, on what gives you the confidence in that number. Is it reinsurance protection? Is it just where you're exposed to and is there any risks to that creeping? That's question one. Secondly, just on HoldCo cash. I'd imagine the profile still looks pretty tasty even after the buyback. Just really wondered if you could give us an update on HoldCo cash levels and what's to come on remittances in H2.
Thirdly, was actually just looking at slide B25, on reserving for P&C. It looks like maybe the net reserving ratio for long-tail professional lines had actually maybe reduced a little bit. Was just trying to understand what's going on there. Thanks.
Alban, I suggest you take the first question. The second one, Andy, we don't really give any detail around HoldCo cash at half year. I think the third one, maybe Scott, can talk about the question around the long-tail professional lines. Alban?
Yes. Thank you, Andy, for your question. On Russia and Ukraine, the EUR 0.3 billion covers the various lines of business that are affected by the conflict or the consequence of the conflict. What I mean by this, it's aviation with the planes that were grounded by the Russian government, and we have shares on policy covers for 300 planes. We obviously don't insure 100% of those planes, but we have shares on those 300 planes.
Second, the second line of business which is affected is what we call crisis management, and that's specific policies that cover, I mean, some customers, because we don't sell that to everyone, on war, on terrorism, on riots, and obviously there are some damages in Ukraine that were covered by those policies. Third one is marine. It's a bit like aviation. There are some vessels that have been retained in the Ukrainian harbors, and there is a risk. What I want to say on all this is that at this stage, we have extremely few claims. It's a provision that we have set aside with scenarios on what could happen. If I take the example of aviation, we know our exposures. That's the 300 planes.
We know what is in damage cover, all risks cover or a war hull. What we don't know exactly is how long those planes will be retained by the government, if they are ever given back to their legitimate owners. As far as the war in Ukraine itself is concerned, and therefore the crisis management policies, we don't know the scope and the length of this. We have done a number of scenarios, more optimistic, average, more pessimistic. We have probability weighted them, and that's how we came to the EUR 300 million, EUR 315 million precisely. Obviously, that will develop. We'll monitor this. It can go up, it can go down, and we will update this regularly.
I think given where we are, it will take some time before we have the final view on this. At this stage, we are comfortable with the EUR 300 million that we have set aside.
Scott, on B 25.
Sure. The reserve number is actually, Andy, driven from the premium volume. For the first half of this year, due to economic conditions, you've noticed there's been a lot less M&A activity, IPO work. We had a pretty big cutback in our volume of business, and that's reflected then in the reserves we set for the first half. Right. It's strictly a premium volume question.
Thank you, Scott. Let's move to Dominic.
Thank you. Dominic O'Mahony, BNP Paribas Exane. Three questions, if that's all right. One is just a follow-up on Michael's-
Is that the new order now, three questions? Go ahead.
For now. Just to follow up on Michael's question about the 70 basis points. It's very helpful talking about the seasonality. Does that apply to the investment income within P&C as well? Should we see that as a bit of a high watermark, plus or minus investment returns? Are there any other factors in there? 'Cause investment return was very strong in P&C as well. Second question, German book, very pleasing to see that transaction come through. You mentioned on the slides that you think it's gonna reduce your market sensitivity. Could you give us some order of magnitude? Is this a point or two of sensitivity, or is this a major change to the group? Third question. I'm just looking at the capital generation slide.
Just trying to bridge from the own funds generation, so EUR 3 billion, to the underlying earnings on an IFRS basis. Okay, you know, sort of nearly EUR 1 billion difference. Conceptually, I think these are roughly the same scope. Tell me if I'm wrong. What are the items there? I'm wondering whether just as at full year, where there was a bit of a shift between the sort of the best estimate of the IFRS prudence, whether that might be a reason why the numbers diverge. Any color you could give on the bridge between those two numbers would be very helpful. Thank you.
Alban, all three for you.
Thank you very much. On the seasonality in P&C fixed income, I mentioned inflation-linked bonds. Where it comes from mainly is Turkey. You saw that our investment yield moved from 2.6%-2.9%. If you exclude Turkey and Colombia, because I have in mind the exclusion of the two at the same time, it moved from 2.4%-2.6%. You see that in that 2.9%, there is one part that comes from inflation-linked bond. The increase overall is still high but slightly lower. Yes. Second, you are right, there is some seasonality on P&C side.
I would say, as opposed to the life business where the duration of assets is significantly longer, there is also more speed in renewing the P&C assets, and therefore we will benefit from higher interest rates faster on the P&C side. On the German transaction and the sensitivity, I'd say it's a step in the right direction. It does not fully upset our sensitivities globally. On capital generation, two things. First, on the life side, it is slightly different because on the life side, what you look at is NBV and the unwind of in-force, which is slightly different from underlying earnings. That can explain one part of the difference. The other part, you're right. There is also some allocation of excess reserve to best estimate in preparation for IFRS 17.
Let's go to Peter, and then we move over here because Will and Farooq's arm will fall off otherwise.
Thank you very much. Peter Eliot from Kepler Cheuvreux. First of all, could I just quickly clarify the comment you made just now, Alban, about your scenario that you ran on Russia-Ukraine? I understood it that EUR 300 million was your best estimate, essentially. Is that what we were supposed to understand? Yeah.
Yeah.
Great. Thank you. Secondly, just wondering if I could revisit your current view on the reserving position. I mean, I guess quite a lot has changed since you sort of set your guidance. The world is quite different. You've got this review. AXA has started to release some reserves. I'm just wondering if you could give us whether there is an update at all on how you expect reserve releases to, you know, on the corridor that you've given us going forward. Finally on the expense reduction, impressive amount. I'm just wondering how much of that, if any, we can attribute to scale, so spreading costs more thinly, or whether it is all, you know, actions that you feel you've taken.
Just wondering if you can give us the split of the sort of the drivers of that 0.9-point improvement. Thank you very much.
Alban, do you want to take all three?
Thank you very much. On Ukraine, the way we have constructed our best estimate is by not taking one number, but taking the various scenarios, and as I said, taking the probability weighted sum of the or average of those scenarios. On the current view on reserving, we
What is your best estimate?
Yeah, it is our best estimate, but it's not like it is a number, one scenario.
It's not deliberately conservative, for example.
No, it is a best estimate. Current view on reserving, there's no reason to change that. It's still between 1.5% and 2.5%. You saw that, for the first half it was 2.4%, will probably be at the high end of the range for the full year as well. No reason to depart from this. Expense reductions, I think, there's a bit of both. You have the amount of non-comm expenses reduction. It was in Frédéric's slide, if I'm not wrong. We reduced non-commission expenses by 2%, and that obviously helps the expense ratio.
Will.
Thanks. William Hawkins from KBW. We're in a world of inflation, Thomas, so I'm going to do three questions as well.
No, in inflation you would have to go to four and five questions.
Thank you.
No, no.
The capital markets have moved a lot since the quarter closed, so could you maybe help us just think about how the solvency ratio has moved more recently, please? Secondly, forgive me if I've missed it, but the 5% inflation figure that you've given for AXA XL is very helpful. What was that, for example, last year? I'd just like to get a view of how that inflation number's changed. Lastly, I know you guys are one of the leaders in the whole transition to IFRS 17 and IFRS 9. Could you maybe give us, you know, some kind of comments about what might you be saying is different about these results if we were in the new world?
I mean, we're very excited about this +11%, but maybe in the new accounting regime we'd be talking about a totally different number. What are some key issues we may have to think about for IFRS 17 and IFRS 9? Thank you.
Thank you, Will. I suggest, Alban, you are answering the first question. Frederick, you take the second one, and I think the third one is a relatively simple answer. We will have a specific session on IFRS 17 and IFRS 9 in order to explain to you in November what the effects will be. Probably today, we will not go into that detail. Alban on the first question, Frédéric on the second one.
Thank you, Will. The answer on solvency, the solvency ratio is fairly simple. It will be down because the interest rates are down. If you use our published sensitivities, you will get to the right numbers. There is no cross effect, convexity and so on that would be of importance there.
I'll start on inflation, and I may leave the word to Scott on comments because there's always a big debate since one of our peers has communicated on the definition of inflation and loss trend. Here, when I'm speaking about 5%, this is about loss trend, so this is frequency times severity. This is strictly speaking, not inflation, even if, of course, this is correlated. I'm sure Scott will confirm and develop, but what we see now at AXA XL is inflation which was around 4% last year, and we see a prospective trend of about 6.5%. Scott, I'll let you develop.
Thank you, Frédéric. To add, specifically on the loss trend, last year we'd be using 4%, so the impact of the inflation is ameliorated by the exposure increase, so you work that through. It's gonna add almost another point at the end of the day to loss trend.
Okay. Farooq.
Thanks very much. I'm going to be a good citizen and only ask two questions.
You are in the deflation scenario.
Absolutely. I'm all for deflation. Yeah. I'm on slide B24. I know that the pricing that you show there is renewal pricing. It's not the same as the price effect. When I compare that with volumes, change in P&C insurance, it looks like you're basically withdrawing everywhere in AXA XL. Is it possible, maybe Scott or, you know, you could talk about the philosophy here and kind of what's driving this. Are there specific things in each area that you're now avoiding? Where does this end? I mean, are we now close to the end, you know? Next year it's going to be more comparable. That's question area number one. Question number two is on COVID-19 IBNR reserves.
How much do you have left and what are the issues? Why are you keeping them? Thank you.
Good. Scott, why don't you go on the first question, B24, the price, the renewal pricing, how we have changed the exposure at AXA XL without withdrawing everywhere. Alban, you talk about the 20% remaining IBNR.
Yeah. When you look at it, 'cause price doesn't always translate 100% into growth, right? Price has, not only can it grow premium, but also you can adjust it depending on your attachment point. If the client takes a bigger deductible, for example, and you hold your price the same, you're getting more money for your exposure. That shows up as a price increase, but you didn't grow your premiums, right? It's a mixed bag. You notice that we grew property, for example. Right now the property rates are still exceeding trend. They're still in the double digits in the U.S., so we're looking at that as a growth opportunity.
We're not growing, for example, in financial lines because the marketplace, there's not as much opportunity there, and there's a lot of capital has come into that business, so we're being selective. We also, like on the international casualty side of things, in the one-on-one renewals, we looked at some and said, "You know what? That trend is starting to move up," so we backed off a little bit. We're gonna continue to change those dynamic dials. We view them all as dials, and when the opportunity and the adequate price is there, we're gonna grow it. If it's not, we're going to shrink it. So that theme is going to continue on, Farooq, throughout the organization.
I think, Farooq, it's important, when you look at AXA XL today, and Scott is too modest to say it, versus AXA XL when he started, it's a very different composition of the portfolio. Probably 2-3 years ago, this was an accumulation of relatively large bets, $50 million, $70 million retained exposure. Today, we have a highly diversified portfolio with a much lower exposure per policy.
You can't hear this on the mic, but I get that. The underlying question was, will we see now, maybe next year, top line being more correlated to price effect than it is this-
Yeah, over time, you'll start to see as the portfolio gets, we work on it more and more adequate, you'll start to see the gap between the growth number and the pricing start to narrow. Right? You'll see that narrow. For example, once we've completed all the work about adjusting attachment points and all of that, you'll start to see that gap narrow.
Okay, Farooq? IBNR.
IBNR.
No, just on XL. You are happy with the answer? IBNR.
I think, Thomas answered that question by directing it to me. We do have indeed still 20% of IBNR reserves on COVID at XL. Will we need them or them all? Probably not. Is it good to have some prudence in XL's reserves? Yes.
What's the absolute dollar number?
We've never given that, but I guess you can. Well, can you? Yes, I think you can, given the total amount of losses that we have on COVID, which are mainly at XL.
Andrew.
A couple of questions if I might. Just on the targeted EUR 30 billion-EUR 50 billion reduction in general account reserves, and we're at EUR 24 billion. It's, you know, at the bottom end. There's hardly anything more to do. It's been nice to see what's happened, and there's been some reserve releases, but it hasn't been exactly transformational. I was just wondering whether, when you look at the 30-50, given what your plans are you likely to be at the top end of that or even exceed that, in terms of the actions which you've got in train? 'Cause it's an 18-month sort of lead time into that. Secondly, top-line growth. This is a sort of slightly softer question.
I mean, 1% is not where you want to be, and I think it's difficult to grow earnings ad infinitum at 7% if your top line's only growing at 1%. Could you give us a sense as to when you've finished re-underwriting bits and bobs of the XL book, what you'd like your underlying top-line growth to be? Then finally, motor severity. What are you planning as to when you're thinking about rate rises in motor which are gonna be needed? What are you seeing across your books in terms of claims inflation in motor?
Let's start with Frédéric on the reduction of the in-force. I will take the top-line question and then on this question around rate rises in motor, since we have Antimo and Patrick here who are responsible for very big motor books, I would like the two of them to answer that question. Frédéric, in-force.
On in-force, we have ambition. We want to do as much as we can do. We've given this range of 30-50. It's always difficult to say exactly where you are going to be because this process take long. Then you have also regulators who have more appetite, regulators who have less appetite. My point is I'm very confident that we'll be well within the 30-50, and I hope we'll be close to the 50.
On the second question around top-line growth, it is true that we would have wished to have more than 1% as a top-line figure. However, as I mentioned earlier, this was a deliberate choice of pushing the lines that we like a lot and slowing down on the lines that we like less. If you go through the different lines of business. I think on P&C we had 1%. On the commercial line, we had 4%, which was heavily drawn down by two areas. One was obviously the reinsurance at XL, we mentioned earlier, -21% on the GWP and XL itself coming to the end of the re-underwriting phase and also not producing a very strong top-line growth.
I would believe that those two areas, and in particular the insurance business of AXA XL, can do much better. If I look at France and Europe that have achieved 6% premium growth in commercial line, I would expect AXA XL to be at a similar level. If you then go to the health business at 13%, I think that is difficult to top. We have the life and savings business, where we have the -5%. Again, deliberate choice to reduce the general account, goes back to Frédéric's questions. Once we have completed this transition, both on the in-force side, but also in the new business to shrink it to the lowest possible level, we should not see a repeat on this.
On the unit-linked side where we had -11%, this is also very much linked to the question in which environment are we in? We clearly see that consumer confidence is reducing, decisions are being delayed. Nevertheless, money needs to be invested. When I look at the recent trends, certainly in France around Eurocroissance, for example, we see that business coming back. Life and savings. Once the general account transformation is done, and certainly on the commercial line side in the P&C, in the XL primary insurance, those are the areas where I would see a significant improvement for us. Our aim should be to be at a top-line growth somewhere between 3%-5%.
Let's go to the motor pricing. We start with France and then go to Antimo Perretta in Europe.
If I start with France on the current year Combined Ratio of motor, what's the dynamic there? It's slightly deteriorating, mostly driven by a deterioration in loss ratio, and the loss ratio is stemming from the hail episodes we had in France. We are managing to contain the inflation, so a net of savings currently because we're used to that and we've managed this over time. We had 4%-5% inflation last year. Through insurance procurement, through the utilization rate, where we still have a lot to be achieved to steer more towards our preferred body shops, there's opportunity there as we're also scaling up our purchasing platform in terms of using spare parts, and this is paying off.
One last thing that I would say on motor, we managed to also contain the deterioration on the loss ratio by improving expense ratio. That's very important. That's something we're steering heavily in France, and that's true across the board. If you look at the combined ratio current year of AXA France, it's improving by 0.5 points, and this is driven by this expense and simplification efforts we're having across the board, whereby we're simplifying organization and we're simplifying our processes and IT. All in all, I think we will be able to pass increased rate because of the power of the brand and continue with the discipline we always had in terms of insurance procurement.
In addition to what Patrick has said, in Europe, we have seen that we had suffered a lot from the new car immatriculations that we have seen. We had 50% less in Spain, on average in Europe, 36% less. This has meant that in the beginning of the year we had less volume. Now we're seeing that we are catching up, so that we see that we have more volume. At the same time, we're seeing the pricing that we had, higher prices that we could put on the market in Spain, higher than 5%, 6% increase in our price. On average, the claims costs above inflation, it's roughly 2% increase overall in Europe.
For this reason, I think we are also benefiting a little bit from the lower frequency, that helps. In some countries like Spain, the lower frequency is roughly at the level that we had before COVID. All the countries we are increasing, but less than before COVID. That helps us. What I also want to say is that in the P&C retail, we benefit a lot from the non-motor, where we increased volume, but cannot compensate the lower premium that we had in motor. Overall, I think it's a point of attention also for the second half of the year.
Thank you, Antimo and Patrick. I suggest we go to the webcast because I believe there is one question on webcast.
The first and only question is from Vikram Gandhi from Societe Generale. He'd like to know, given your confidence about achieving the underlying earnings per share CAGR at the top end of 3%-7% range, can we say that should pretty much be the trajectory of dividend per share regardless of the impact of IFRS 17 implementation?
Thank you. Thank you for that question, which is a challenging one. First of all, we have said we would not go into detail of IFRS 17 today. We actually need to, you know, discuss that question when we have shown you the impacts of IFRS 17 and IFRS 9 in November. It is clear, I'm repeating again also what Michael's question was very much hinted at. It is very clear that we want to continue that trajectory. We want to make sure that this trajectory will result in an attractive dividend growth that is linked to the business growth that we are having. Again, it's the final word is with the board of AXA.
When you go back, we've always followed that practice. Despite the fact that we have a change in accounting regime, we want to do everything to continue the good execution and the nice trajectory. I see that we are already beyond the time. I wanna thank you for your attendance. Thank you for the great questions, and wish those of you who haven't had a summer holiday, a great summer holiday. Thank you very much.