Hello everyone. Thank you for being connected for this audio press conference where we present the.
Half year presents for 2025 for the AXA Group.
During this press conference, Frédéric de Courtois, Deputy CEO, or rather Thomas Buberl, CEO. Frédéric de Courtois, Deputy CEO, Alban de Mailly Nesle, the CFO, will present the main takeaways of this. In the room there's Ulrike Decoene in charge of Sustainable Communication, Patrick Cohen in charge of Europe & Health, and Guillaume Borie, CEO of AXA France.
Who will be able to answer your questions. I now turn it over to Thomas Buberl.
Thank you, Ziad. Hello everyone. Welcome to the 2025 half year earnings press conference of the AXA Group. In introduction, let me share with you the main takeaways of this very good first half. After that I will turn it over to Frédéric de Courtois and to Alban de Mailly Nesle to dive into our business and our main KPIs after that. Obviously we are ready to answer your questions.
Now looking at the first transparency. First of all, we are achieving an.
Excellent performance this half year in line with the goals of our plan Unlock the Future. Over that half year, similarly to 2024, we are proving our ability to generate organic growth, which is very important and shore up our operational technical excellence, two mainstays of our plan in a context increasingly uncertain and which is difficult. We owe these very good results to the commitment and to the professionalism of our more than 154,000 employees and agents. We'd like to thank them very warmly. Let me now drill into the main indicators. Our revenue is increasing by 7%, sharply up over this half year. It tops the EUR 64 billion. Such organic growth was generated by, on the one hand, all our business lines, that is Property & Casualty Insurance, Life and Savings, and Health, as well as in every region.
Such result proves again the relevance of our strategy, the strength of our model, which is well balanced and diversified, and certainly the quality of our distribution networks. Our underlying earnings hit as well a very good level. It increases by 6% to hit EUR 4.5 billion. All of this is the result, on the one hand, of very good technical and operational discipline, but also due to our initiatives in data and AI as well as in the development of our distribution networks. Our underlying earnings per share are rising as well, by 8%.
They are in the upper range, which.
Is the target of our plan's goal.
Which is between 6% and 8% on average per year. Lastly, our bullet is very robust with in particular Solvency II ratio, which is.
Keeping up at a level which is quite high at 220%, which is up by 4 points relative to 2024.
AXA is therefore very well positioned to.
Achieve the goals of its Unlock the Future plan. Today we are in the middle of.
That plan, which is over three years.
Let me now walk you through the details of this performance by business line. As I just said, our revenue is growing steadily, and we find this momentum.
In every line of business.
& Casualty Insurance, revenues hit EUR 34.1 billion, up by 6%. Such growth was driven both by commercial insurance, which is growing by 5%, and through personal lines, up by 7%. In Life and Health, second big business lines, our revenue is hitting the EUR 29.2 billion, which is up by 8%. On the Life segment, we're obtaining a rise of 9% to hit the EUR 19.1 billion. Such rise is driven by protection and through unit linked accounts. Now on the Health sector, gross written premiums increased 6% to reach EUR 10.1 billion, with growth in most of our regions in employee benefits and also for personal benefits. I will now share further details on the acquisition up to 51% of Prima.
An Italian insurer, which we announced this morning.
As you noticed, we announced that acquisition of Prima, who is a leader in Italy of the direct insurance, for an amount of EUR 500 million. Such acquisition will strengthen our market share in the motor insurance in Italy by doubling it nearly in terms of size. Such deal will allow us to strengthen our presence on that market, which is significant and which for us is very strategic. In Europe, last year we already announced and we carried out the acquisition of a company called Nobis. This new acquisition of Prima will allow us to continue along the same momentum. As a matter of fact, Prima posted revenues of EUR 1.2 billion in 2024, which has been growing for several years. Lastly, it strengthens our presence in the direct insurance business, the distribution channel, where we already are leaders in certain countries, such as France, with direct insurance.
I will now give you further insights into the segment of direct insurance. Direct insurance meets the expectations of a segment of key accounts. We ascertain this in several of our markets where we are growing this kind of business and successfully, I must say, for AXA. AXA Direct represents already revenues which is significant at EUR 3.5 billion across eight countries. We are in the top three in France, in Belgium, in Spain as well as in Ireland. With the acquisition of Hema, it will from now on EUR 4.7 billion. To sum up, whilst continuing to grow our traditional distribution networks, we see direct insurance as a significant growth lever which we will continue with in the next few years. I will now summarize our main financial goals. This slide, you know it already very well. It's the summary of our KPIs of our Unlock the Future strategic plan.
In light of such results, we feel that we are very well positioned for 2025 and to hit the goals of our plan. Over this first half we can take away the following. First of all, AXA is achieving excellent performance in the footsteps of what we already achieved in 2024 which was the first year of our Unlock the Future strategic plan. Secondly, we are posting a level of profitability which is highly satisfying with underlying earnings up by 6%. Thirdly, the disposal of AXA Investment Managers and the acquisition of Prima bears out our will to continue to refocus and invest into our core business which is insurance. Fourthly, Solvency II ratio is at 220% which reflects a very good level of financial solidity. I will now turn it over to Frédéric de Courtois who will now drill into the very good performance of our business line.
Frédéric, over to you.
Thank you, Thomas. Hello everyone. Let me start with the first slide, saying that these first half results demonstrate the strength of our model. Now, what is our model? Thomas said it, it is insurance. Only insurance and again only insurance. Since the disposal of AXA Investment Managers, which was effective on the 1st of July based on an important partnership with BNP Paribas, we want to focus on the insurance business. Now, if you look at this chart here, you can see that our model is, number one, well balanced with about half of Property & Casualty Insurance and half of Life and Health Insurance business. You do not see this here, but we told you that we had half of B2C, that is retail personal lines, and half of our business is B2B, business to business.
Our model is well diversified geographically, as you can see here, with very strong positions in a number of countries. We want to be focused on those geographies where we reach critical size. Well balanced, well diversified, and well focused, and an effective business model.
Now.
Moving on to the other slides to walk you through the main business line starting with P&C. Knowing that the P&C business accounts for half of our revenues, grew by 6%. Now our priorities in this P&C business, number one, we want to grow the mid market segments, SMEs, which is a strong area of growth and focus. At AXA XL, the priorities are discipline, focusing on client loyalty. These are two priorities for the commercial lines. Now looking at reinsurance, growing by 11%, which is driven by business development connected with disposals in alternative capital. With respect to net premiums, we want to underwrite business and transfer this to alternative capital, which we have done. In retail lines, growing by 7% with good increase of the number of contracts and the number of clients, which satisfies us in a favorable pricing environment across the board.
In the retail personal line business now, underlying earnings to the right hand side in the P&C business growing strongly by 7% and among others due to the improvements of technical margins as well as increased investment income on the back of increased interest rates, which is good for us. Now the combined ratio is our key performance indicator in the P&C. Our combined ratio is slightly up year on year to 90%. A very good combined ratio level with improved technical margins based on what I shared with you before. The technical margin in commercial lines which remain at a very high level, Nat.
Cat.
Loss ratio is below our normalized ratio, which is 4.5% of premiums. We stood at 3% in the first half, and this is stable compared with the level in 2024. Finally, we improve productivity, and you can see this with an improved expense ratio, which is a subject of importance for us and which is related with our initiatives and investments in growth-related projects, including artificial intelligence projects, which should boost productivity and effectiveness in the insurance business. Moving on to the next slide with the life and health segment. You know that the life and health businesses are two very strategic business lines for us.
We've been reviving or relaunching life insurance business, which we never abandoned, which we are making a moral priority now, with very satisfying growth in the first half, with premiums growing 9%, with fine growth posted in France and good growth being generated in all of our priority countries, with unchanged strategy focusing on protection, on the unit-linked business, and on the capital-light general account products showing fine growth across all these business segments. Health insurance is a strategic line of business for us, growing both in Europe and in Asia, posting fine growth both in personal health business growing by 7% and in the employee benefit segments with good growth growing 4% with very good momentum. The last very important indicator is net new money or net inflows, premiums minus outflows, with net new money. Net inflows growing significantly, which is in line with our goal and our ambitions.
Next slide, you have the underlying earnings in life and health increasing by some 5%, mainly driven by improved technical results in the health business across the board, but mainly in the U.K. You know we had difficulty with the National Health Service in the U.K. We are reaching our goals with financial income, investment income increasing on the back of increased interest rates, with increased tax driven by increased earnings as well as a one-off impact due to increased taxation, corporate taxation in Japan. We are reaching our goals in the health life business. By way of conclusion, above and beyond this very fine performance now, what are our key areas of priority going forward? The first of those priorities will be to energize our life and health business even further, to focus our efforts more on new products, on new networks.
We can see that it's done starting to be effective in this first half, and we are very satisfied with this. Our second priority is to transform our skill sets, and we've been investing into data, data management, and AI solutions. We are fully convinced that this will have a very strong impact on our businesses, and it will be an upside. We are investing massively in these areas. The third current project priority is and will be to extend and expand our distribution networks. We said that when we announced our plans with even more agents, even more salespeople, salaried salespeople. We are doing this especially in France, and we'll be diversifying our distribution footprint, and this is why the newly acquired Prima is of great importance.
Historically, we've had a very strong presence in the direct insurance business in a number of countries, and acquiring Prima, which has been a success story in Italy, is of great importance for us. We'll be beefing up our distribution channel, and we'll be beefing up our focus on this direct insurance distribution channel. The fourth priority in the commercial lines will be to keep developing our business in the mid-market SME segments, knowing that historically we've always had very strong positions, and we've been investing to further expand and develop these positions across all the European countries and in the U.S., and we are fully in sync with our strategic plan, including the U.S. The last priority, which I'll be mentioning, will be to strengthen the loyalty and retention of our clients, which is of importance.
Of course, this is not new, but this is of importance for us in the insurance business, and we are focusing and investing even more to strengthen this retention level of our clients. So much for what I can share with you. Very fine performance, an acquisition in Prima which will hold high promises. I turn over to Alban de Mailly Nesle.
Thank you Frédéric and good day. Now on slide 18 you can see the various figures that Frédéric has already spelled out. This is about the various business lines in Property & Casualty Insurance. We're growing by 7% in life and health, up by 5%. We haven't mentioned yet Asset Management. As you know, this is the last half where we consolidate AXA Investment Managers. Because we finalized the sale on the 1st of July. The results of AXA Investment Managers are down by 14% in the first half relative to last year.
Why?
Because AXA IM invests in its future growth and therefore saw its costs rising a bit. The last segment is about the holdings, which remains steady at - EUR 0.6 billion, as we indicated previously. On the whole, our underlying earnings is increasing by 6%. When you add to that the impact of what we call capital management, that is mainly the buybacks that we operate year after year, and which, when we strip out the - 1% currency change because the dollar and yen went down, the underlying earnings per share therefore is growing by 8%. Therefore, 8% is at the upper range that we indicated for our plan at the time. This is a very good performance. Now the net income is slightly down by 2% despite the rising underlying earnings.
It is due to nearly only to the mark to market of assets in dollars that we have in certain balance sheets. It's a mark to market, and when the dollar rises again, we'll be winning back that loss. There's nothing there to worry about in the fact that we are in the red when it comes to that particular item. Now a few words about our equity.
Page 19.
Firstly, for the half year there's always a seasonality effect because we have half of the year's results, but we have the full dividends and the impact of the buyback. Each time our equity at the end of the first half year is a bit lower than at the end of the year. This is increasing this year by the fact, as I said before, that the dollar dropped and this had an impact that was a bit negative on our shareholders' equity when you look at our ratios. The ROE is at a level which is very high, but flattered due to the fact that our equity, as I said in the first half, is suffering from the seasonality effect.
However, we have a very good profitability.
Likewise, the gearing ratio is at 23.4%.
Up compared to what it was last year.
At 23.4% for the same reason and also because we borrowed EUR 2 billion in the first half in subordinated debt. This is in anticipation of the coming management of the debt which benefits from the grandfather's clause and Solvency II. Our gearing ratio therefore should get lower in the next periods. I would say now our solvency, which is posted very high at 220%. What we should take away from that is that, akin to previous periods, we generate 15 points of capital per half year, in this case at the upper range that we had indicated. We are provisioning as well in solvency terms the dividends and buybacks that we will be paying next year and related, that's - 12 points. You can see as well a key point, currency effect has no impact whatsoever since our equity went down a bit.
Our working capital requirements also dropped and we are gaining three points with different asset subordinated debts that I mentioned, which we issued. Also, the fact that we finalized the acquisition of Nobis Group in Italy. This is a negative one. To be very thorough, I would like to specify here that the impact of AXA Investment Managers and the buybacks relative to it are not included in those figures. They will be posted in the next half year. Solvency therefore is very high at 228%. Robust balance sheet. I'll turn it over to Thomas for the wrap up.
Thank you, Alban. You've seen it all. Now, by way of conclusion, these first half earnings demonstrate that we have great confidence in executing our plan and our capacity to generate organic growth. We are posting excellent performance for this half year, and this will enable us, going forward, to keep serving and supporting our clients and quite certainly will be offering even more protection services and solutions in the face of ever-growing risks. Acquiring Prima in Italy is confirming our desire to strengthen our presence in strategic markets and in our core business, which is insurance. This is also proof of how relevant the strategic plan of the Group, which was started in 2024, as well as the successful transformational journey since 2007. We are available to answer any question you may have.
Now.
We have the first question by Thierry Gobi of News Assurance Pro. Thierry, you have the floor. Please switch on your mic. Thierry, we cannot hear you, please switch on your mic. Let's move on to the second question by Guillaume Clement of News Assurance Pro. Guillaume, you have the floor. Please activate your mic.
Hello, good day.
Yes, we can hear you, sir.
I have two questions. These first half earnings results include AXA IM. I would like to know the precise amount of the precise outflows in the first half. I believe it is EUR 3 billion, including EUR 10 billion outflows from third parties. Can you give us an update on that? Can you also share the amount of the net income number for AXA IM for the first half? I believe it is EUR 28 billion.
Thank you very much, Guillaume.
I turn over to Alban de Mailly Nesle who will be answering your two points. That is the net inflows and the net income for AXA IM. Now, what needs to be highlighted with respect to AXA IM is that it's always a very complicated period when you transition in between two companies. AXA IM didn't lose any assets on the back of this disposal process. Indeed, there was some wait and see phenomenon from investors waiting to see what would be happening on the side of BNP Paribas. Fewer inflows for sure, yet not any more outflows from investors. Now, digging deeper into the analysis, what you see is.
Mandates.
Explain the outflows, but this was expected, this was in the multi-asset business and this was partially offset by very good underwriting in the infrastructure debts and the real assets with very fine performance across these two asset classes. With respect to AXA, AXA being the first client of AXA IM, the cash flows generated were positive ones for AXA IM because we underwrote EUR 6.9 billion in funds into AXA IM. Now with respect to the net income for AXA IM, yes it was down. This is explained by a number of technical items due to the disposal, including some consolidation accounting entries which bore on the bottom line of AXA IM, which does not reflect its real profitability level. You should really focus on the underlying earnings which came out EUR 175 million to understand the profitability of AXA IM over the next quarters. Next question please.
We don't have any more questions coming from Teams. We have a question from axa.com from Thomas Luckham from Insurance Post. The question is the report mentions a softening in the U.K. motor pricing following strong repricing in 2024. Can you elaborate on how that's affecting AXA's P&C performance in the U.K., particularly in terms of margins and customer retention. Thank you.
Thank you, Thomas, for your question. I will hand over to Patrick Cohen, who is responsible for Europe, and Europe also contains the U.K. Patrick.
Thank you, Thomas, and Thomas for your question. It's true that in the first semester the U.K. retail market shows a decrease in pricing. From statistics we have, we are around a drop of 5%, and some projections show that the market overall profitability could be above 100 for this year. The good news for us is that AXA U.K., both from a profitability standpoint, is improving significantly in this first half of the year, and at the same time we are regaining net new customers in a significant way. Fundamentally, we are focusing, and that's our strategy on the retail business, to focus on sound technical profitability and customer retention. We have massively invested in our claims, both to make them more efficient and serve better our customer, but also to make sure we have a greater grip on the steering procurement control.
We're sophisticating our pricing with more variables also to reflect customer loyalty, and we're investing across the board in AI and GenAI to better serve customers. We are providing tools for our agents in call center to summarize call, to guide them to answer faster to customers. We do the same when it comes to complaints management. We have an entire plan that enables us to be more efficient on one end and to serve better customers. We are pleased, both from a profitability standpoint and the fact that we're regaining net new customers. I would add that we are extremely excited by the new exclusive partnership we have with Lloyds Banking Group, which is a leading banking group in the U.K. with 28 million customers. We believe this is going to help us grow our customer base and grow our business profitably going forward.
Thank you, Patrick. En passed.
Moving on to the next question.
There are further questions.
There is no other question, either online or from accident. Oh, sorry. Apparently we have another question. Just a second.
Over to you.
Thank you for switching on your mic.
Hello, sir. I'd like to come back to Italy to a certain extent. Could you summarize your positions in terms of market share in Italy in P&C? If I understand, in motor for personal lines, it will double it with 10%. And in Life Insurance, in P&C, in general, Home Insurance, do you feel that today you have adequate positions or are you considering other acquisitions in Italy? Another question now on the package available for acquisitions, given the shy buybacks to strengthen the dilution of AXA IM, could you remind us of the figures that EUR 3.8 billion of share buybacks and of a package for acquisitions which is planned?
Thank you, Jean Luc, for these two questions. I will turn it over for Italy to Patrick Cohen. After that, on the question of the acquisition package, I will ask Frédéric de Courtois to step in.
Obviously, we will not talk about potential acquisitions in the future. As we reminded in our earnings, our focus is on the organic development of AXA, which as you saw, is doing quite well. If there are any acquisitions to be made, we'll be looking at them. Our main focus right now is organic development. Patrick, now on our position in Italy, which has certainly grown a lot after the acquisition of Nobis and now.
Prima.
Patrick,
thank you for your question. Let me start by telling you that in 2024 the revenue of Italy stood at EUR 6 billion. We at the time were number four in P &C and we will considerably strengthen our position in Italy with the acquisition of Prima and where we are very enthusiastic. Let me add a few elements, by the way, that will bear out what Thomas said. We totaled with the acquisition of Prima about 7 million clients. Prima, if you want, is the insurtech, which is the most successful in Europe. It's ranked number one in direct insurers in Italy, with nearly 40% market share. Today they are on new policies issued. They are number one on the market. They meet demands from clients who want a digital experience above all and who are very sensitive to prices with regard to customers.
We have in our agents networks with Nobis acquisition and with Prima's acquisition, we have strengthened considerably our ability to cover all the client segments. With Nobis, we are entering into the motor business and with Prima, into the direct insurance business. We have a very strong position in the agents channel, where we are ranked number four today. This acquisition definitely is helping us at scale and we are number four, as I said, in 2024 on the motor business. The forecast we have for 2025 ought to considerably shore up our position, prop them up in the motor business, in the market. Italy is a market which is strategic. It is in full swing with a very good level of profitability.
I talked about Property & Casualty Insurance, obviously, as you know, we have a partnership with Monte dei Paschi di Siena, which is one of the main banks and where we have a momentum which is quite satisfying in this early part of the year.
Thank you, Patrick. I'll turn it over now to Frédéric on the M&A business, surely.
M&A activities, our starting point with respect to cash and solvency is very robust. Having said that, we do not have an M&A budget. The priority goal with our plan is organic growth. Last year we grew 8%. This year we grew 7% in the first half. We are very satisfied with this accelerated growth journey. This is our priority now. When nice opportunities arise, like with Prima, we are able to seize them. There are very few of them today and we do not have any specific M&A plan today. Again, we are being very opportunistic in our approach. We are being very disciplined. Everything is expensive today, you know that, right? Acquiring Prima has been done in a very disciplined manner. If you see our PE multiples that you paid for.
In any case, when you carry out acquisitions, this is with a view to strengthening our positions, existing positions, and this is the case with Prima. Also to acquire any specific skill sets and expertise areas. This is the case with Prima. We really liked their direct business skill sets. We are, by doing that, strengthening our positions in Italy and in the direct insurance business.
Thank you, Frédéric. Moving on to the next question, please. The next question is a question by Thierry Gobi from News Assurance Pro, who cannot switch on his mic. His question, I read it out, is on the fine performance of the reinsurance. The question, as I quote, can you give us more information? Is whether this business is connected with Cat Bonds and ILS. Yes, thank you, Thierry, for your question, says Thomas Buberl.
It is true the performance posted by our reinsurance business has been very fine, with our revenues growing by 11%. Frédéric, could you answer this question? Which is connected to ILS and the Cat Bonds?
Thank you for your question. First of all, note that, and it's important, that for the past two or three years we have restructured the AXA XL RE business, which is about reinsurance. It's important to note that it worked. Of course, the market is sound, but within that market, AXA XL has performances which are quite satisfying. We've reduced our exposures, we've implemented underwriting which is more disciplined. We are very happy with their performance. Beyond this, we are not specifically doing any business when it comes to the ILS funds or the Cat Bonds. That's not our positioning. Having said that, sometimes we dispose, AXA XL RE disposes business in this form to ILS funds, which generally are financed by private equity funds, or to Cat Bonds. This is what we call XL3 retrocessions on certain businesses.
It could be given to these funds which essentially are involved in NAT cats also in the past. That will be the case probably in the future. That for our business, which is not AXA Accelerate, which is about the insurance business, but we cede Cat Bonds or to ILS funds. For us, we see these opportunities in terms of RE retrocessions, but we are not active when it comes to underwritings.
Thank you, Frédéric. Next question, if any.
Next question is from Maximilian Voltz from Plato. Maximilian, it's your turn. Please turn on your microphone and go ahead.
Thank you very much. I have two short questions. Could you please say a few words about the state of the German market and whether there are plans to expand the business? In particular, how do you plan to expand in the Life and Health Insurance sector, which is dominated by Allianz and Generali. Thank you very much for your time.
Thank you very much, Maximilian, for your question on Germany. Patrick, if you could take it.
Sure.
Thanks, Maximilian. I am very, very pleased to share with you that the results in Germany for this first half of the year are really excellent. They're excellent first off because we have a strong momentum in terms of growth and that is true absolutely across all lines of business, P&C , life and saving, and health. Furthermore, we are strengthening customer satisfaction again here across the board. From data we have, we're number one in P&C , in savings, and number two in health. We have completely turned around and improved our profitability after the year 2023 in P&C . We are seeing a very strong momentum in life and saving with NLP growth at double digits.
This is tied to the fact that we have reshuffled our product offer both in single premium business and regular business, very much in line with our strategy to reposition our offers on long-term saving and retirement solution. We fundamentally streamlined the funds in our offer, simplified them with three, four max thematic funds, and really worked also to have, let's say, more cost-efficient offers and reduce our fees. I am very pleased with the business on life and saving. I would add also double digit in APE in health. I'm also very excited by the possibilities that Germany is paving the way in Europe when it comes to AI and GenAI applications.
We are seeing great examples, whether we're talking about claims or we're talking about underwriting, that are really making a difference in serving the customers, in having cycle times that are much shorter, and this is really promising for the future.
Thank you, Patrick.
Are there further questions?
There are no further questions either online or from axa.com. Thank you.
Merci. Merci.
Thank you very much. Thank you for attending this call. Thank you for your questions, and I extend my best wishes for the summer. Thank you.