Good morning. Thank you for standing by, and welcome to AXA nine-month 2026 Activity Indicators conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star and two. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Anu Venkataraman, Chief Strategy Officer and Head of Investor Relations. Please go ahead.
Good morning, and thank you very much for joining AXA's nine-month 2026 Activity Indicators call. Our Group CFO, Alban de Mailly Nesle, will walk you through the highlights of the press release that we issued last night, after which we will be ready to take your questions. With that, I hand over to Alban.
Thank you, Anu, and good morning to all of you. Thank you for joining the call. Let me begin with the key messages for the first nine months of 2026. AXA delivered a strong performance over this first nine months, sustaining the momentum from the half year, supported by the diversity of our business model, the quality of our franchise, and continued good performance across key markets. Total revenues increased by 5% to EUR 93 billion, with growth well-balanced across our businesses. Our Solvency II ratio stood at 213%, demonstrating the resilience of our balance sheet in a more volatile market environment. Let me now turn to our business performance, starting with P&C. P&C revenues were up by 3% to EUR 48.1 billion, with a balanced contribution from price and volume.
In personal lines, revenues were up 7% to EUR 17.2 billion, and momentum remains strong and broadly in line with the first half, supported by continued price increases across geographies. We added 2.4 million net new contracts over the period, reflecting an acceleration in customer growth. The growth rate in personal lines is calculated with Prima's contribution to nine months 2025 as it had already been consolidated, and the proportion of the business recaptured was the same as in nine months 2026. Prima contributed EUR 1 billion of gross written premiums in the first nine months. This reflects both commissions paid to the MGA and the initial recapture of approximately EUR 0.5 billion of the premiums. EUR 0.5 billion commissions, EUR 0.5 billion premiums. On a standalone basis, Prima's revenues increased by 32% to EUR 1.7 billion. Moving to commercial lines.
Revenues increased by 1% to EUR 28.7 billion, with trends across our two sub-lines broadly consistent with those reported in the first half. In commercial insurance, excluding AXA XL, revenues were up by 4%. This was driven by a favorable pricing environment in France and across Europe, with overall pricing up 2%. We also delivered positive volume growth, particularly in France and international markets, reflecting the strength of our franchise and distribution capabilities. Looking ahead, we remain confident in our ability to continue growing this business profitably. At AXA XL Insurance, our approach remains consistent. In a softening market, we will grow where market conditions support adequate returns, while maintaining discipline underwriting and exposure management where pricing is less attractive. Against this backdrop, AXA XL Insurance revenues declined by 1%, with pricing also down 1%, broadly in line with the trends reported in the first half.
In property, while pricing is softening, - 7%, margins remain attractive and above our return hurdles. In casualty, rate increases are in line with first half, + 4.5%. We remain highly disciplined and prioritize margin over volume. In professional lines, pricing is negative, - 2%, but appears to be bottoming out after several years of declines, and there as well, we remain disciplined. Specialty comprises a number of distinct lines with different market dynamics. Overall, pricing remains broadly stable, and we continue to see attractive opportunities for profitable growth in areas where AXA XL has deep expertise. Our strategy is unchanged, disciplined underwriting, expense management, and growth only where returns meet our hurdles. Finally, in reinsurance, revenues were down by 9%.
Renewal pricing declined by 4% versus nine months 2025, with pricing down 8% in property lines and stable in the rest of the business, which reflects a relatively resilient outcome in the current market environment. Consistent with our underwriting discipline, we reduced volumes where expected returns did not meet our target. Turning briefly to natural catastrophes. Group experience in the first nine months was above budget. The third quarter was active in Europe, with drought and several hailstorms affecting France and Switzerland, where AXA has high market shares. As a reminder, we manage NatCats, PYDs, and discount benefits together, with a focus on maintaining a stable overall contribution to profitability. Now we turn to Life & Health. In Life & Health, premiums were up 7% to EUR 44.8 billion. Both our short-term and long-term businesses delivered strong performance.
In the long-term business, premium increased by 7%, reflecting strong sales momentum across G/A Savings, unit-linked, and protection. In the short-term business, revenues also increased by 7%, primarily driven by positive price effects in health across all geographies. Net flows were strong at EUR 6 billion in the first nine months, compared with EUR 5.6 billion in the prior year period. Overall, the performance demonstrate the relevance of our product offering and the strength of our distribution capabilities across key markets. Let me now turn to new business metrics. New business CSM grew by 1%, supported by strong volumes in savings and good margins. This was partly offset by lower health sales in Japan amid heightened competition. In Japan, we are shifting our commercial focus from health to protection, where margins are attractive and stable.
As in the first half, high interest rates, notably in Japan, weighed on our new business CSM. Excluding this impact, new business CSM would have grown by 4% on a comparable basis. As a reminder, our new business metrics at nine months are not updated for changes in financial or actuarial assumptions. Those are refreshed at half-year and full-year. Given the evolution of interest rates since June, particularly in Japan, we expect the full-year assumption update to create further pressure on reported new business metrics. I now move to Solvency II. We continue to operate at a high Solvency II ratio that stands at 213% at the end of September. Our ratio was down five points from the first half, mainly explained by the following.
First, one point of net capital generation, made of seven points from normalized capital generation and -6 points of accrued foreseeable dividends and annual share buybacks, and -5 points unfavorable impact from financial markets, reflecting increased volatility, notably on interest rates, higher inflation expectations in the Eurozone, the widening of government spreads, including also -2 points impact from cross effects. As a reminder, the sensitivity of our solvency to OAT spread widening is minimal. To conclude, AXA delivered a strong performance over the first nine months, combining strong growth, disciplined underwriting, and continued capital strength. We continue to leverage the strength of our franchise to drive growth in retail P&C and commercial insurance, excluding AXA XL. Together, they grew +6%. At AXA XL, we are actively managing the cycle and remain selective, prioritizing returns over volume.
AXA XL is well-positioned to capitalize on structural growth opportunities and maintain attractive margins. In Life & Health, strong sales momentum and net flows support the continued growth of our future earnings base. Our 213% Solvency II ratio, prudent reserving, and high-quality investment portfolio provide resilience in a more volatile environment. Taken together, these elements give us confidence in our ability to deliver the 2026 underlying earnings per share growth at the top end of our 6% - 8% target range. I am now happy to answer your questions.
Thank you. This is the conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Andrew Baker, Goldman Sachs.
Hi. Thank you for taking my questions. First one, just on AXA XL Insurance, it looks like there was a sequential pricing improvement in the third quarter versus the second quarter. Are you able just to give a bit more detail on what the underlying driver of this was? Secondly, again, just on third quarter standalone, it looked like U.K. and Ireland personal lines pricing was really strong. Again, just curious what you are seeing in this market and what your expectations is for pricing going forward here. Thank you.
Thank you, Andrew. Good morning. On AXA XL Insurance, I would say overall trends are very much in line with what we saw in the first half. You heard the details I gave by line of business. I think there are probably two things. The first one is we do see an improvement in financial lines in Q3 versus the first half, and there is probably a mix effect between the various lines of business. Otherwise, for instance, if I take property, it was -7% in half-year and the same in Q3. On your second question, yes, it is true that in the U.K. in particular, we see significant price increases in motor over the third quarter. Yes.
Thank you.
The next question is from Michael Huttner, Berenberg.
Good morning. I've got two, one on health and one on riots. On health, 7% which sounds. You said mostly pricing. Maybe you could be just a bit more precise. You remember, well, I'm sure you do, on the 15th of September, you said you expect the combined ratio to improve 1% in the next three-year plan. To me, the 7% pricing sounds better. Maybe you could explain that. Then on riots, if you could give us a number and say how big riots would need to be to impact your 8% target EPS growth.
So, thank you, Michael. On health, the 7% is there again very much in line with what we said at half year. You can say that it's only pricing on this. We plan very clearly to grow volumes in health in the next plan. But for the time being, in this quarter, we have kept on focusing on margin. You know that we are, for this plan, a target of reducing our combined ratio in short-term Life & Health by 300 basis points, and that's the focus of this plan. By the way, it's also the focus of next plan because we want to improve it by one more point. So, 7% pricing in Q3 and in nine months. On riots, look, at this point, we don't have the final number because we've given our customers more time to report on their losses.
You should see that as a mini NatCat. It will not be material for the group. I don't know what it would take for that to be material. I count on the French police to make sure that it's not material, and that should be okay.
The next question is from Farooq Hanif, JPMorgan.
Hi there. Thanks very much. My first question is on Prima. Can you tell us what the percentage level of recapture was in 3Q and give us an update on how you think that's going, whether it's stronger or in line with the kind of guidance you've given on that already? On volume growth, I estimated that in P&C, the volume growth was a bit less than pricing. You said it's balanced, but it feels like 2% pricing, maybe 1% volume growth. Do you think that's enough? Are you bullish that you can raise that volume growth outside of Prima? Because obviously, if you have 2% pricing, 1% volume growth, and approximately 1% Prima every year, it's not getting to your 5%. If you could just comment on that as well.
Finally, in life, in your reported new business value margin, just wanted to understand a little bit more about why that margin was down. You had very good new business growth, but just why is the new business margin weaker in life? Thank you.
Thank you, Farooq, and good morning. On Prima, up to now, we have recaptured EUR 500 million of premiums out of a total written by Prima of EUR 1.7 billion. We have recaptured roughly 30% of the premiums written. That's exactly according to our plan, and that should grow to approximately 40%-45% at the end of the year. In 2027, we will recapture close to 100% of Prima's premiums. You saw that Prima grew by more than 30% its premiums over the first nine months compared to 2025. On volume growth, I'd say we have very strong volume growth in personal lines, even when you exclude Prima. That's true in France and in Europe, and we're happy with that level.
Obviously, we have a plan to improve retention and cross-sell, as you know, the one that we disclosed a bit more than a month ago, but we're already very happy with that. On commercial lines, ex-XL, we have a good balance. I think that the 4% growth that we have is really slightly more than 2% in price, slightly less than 2% in volumes, but the two round up to 2%. Is it good enough? Well, I think we have a plan again where we want to grow P&C revenues in the next plan by more than 5%, bearing in mind that XL should be positive in the next plan. It was slightly negative in the current nine months. We do see, or we do plan for improvement in commercial lines in our plan. Then, NBV margin.
The new business CSM overall is up by 1%, 4% if you adjust for the interest rate impact. The reason why you move to a more muted growth of NBV, it's very much, in fact, the impact of our Chinese joint venture, which weighed a little bit on the NBV number, because you know that we report ICBC-AXA with NBV and not with new business CSM. That's the reason.
Okay. Thank you.
The next question is from Iain Pearce, BNP Paribas.
Hi. Morning. Thanks for taking my questions. The first one is just on the net flow number. The Q3 net flow number for the capital light savings business was nil. I understand there's been some challenges in a couple of markets in particular, but could you just give us a picture of sort of, are you seeing anything in terms of outflow, or is this lower new business inflow that you're seeing? Anything particularly to do with lapse, given the slight change in, or the change in the interest rate environment? And the second one is just on health new business margin, actually, as well. That looks like that was down quite a lot, Q3 on half year. Could you just give us some details on sort of what's driving that new business margin in health in Q3? Thank you.
On the net flows, I think the first, they are still strong at EUR 6 billion. What you see is the following. Clearly, we had a slowdown in inflows at AXA MPS that we attribute to, I would say, what's happening around BMPS itself. We also saw a slight slowdown in AXA France in terms of premium inflows, and you may have seen that it's something that is impacting the whole market. It's not specific to our own business. There's a slight slowdown here. I think those are the two reasons why you see a lower growth in our net flows in Q3 compared to half year. In health, new business margin, that's really the fact that we grew our Japanese business less, and therefore, it's a mixed effect. Our new business in terms of health is really Japan and Germany.
Here, that's the mixed impact of Japan that has a slight impact on the new business value margin. Also, why did we do this? It's also the fact that in Japan, as I mentioned in my opening comments, we are focusing more and more on the protection business as opposed to the health business, which is a bit saturated and where competition is extremely high.
Okay. Just going forward, the new business margin in Q3, given the mix, might look more similar to Q3 going forward, should be a good sort of run rate?
In terms of margin, yes, that's probably the right thing. Yes.
Perfect. Thank you.
You have the impact of interest rates, as I mentioned—
Yeah
—during my opening comments.
Perfect. Thank you.
The next question is from Kailesh Mistry, Bank of America.
Oh, hi. Sorry. Good morning. Thank you for taking my question. A couple. First one is just on retail P&C. Would you say that the price increases that you flagged in the release are keeping up with claims inflation, or do you expect more in the coming quarters in order to keep that retail margin flat? The second one is just to clarify on the Solvency II ratio. I think you mentioned that the OAT bond spread had zero impact from a mark-to-market perspective. Could you just confirm that following the Solvency II review, that sensitivity would remain the same? Thanks.
Thank you for your two questions. On the retail P&C price versus inflation, at this stage, we see extremely little impact, if any, of the higher general inflation. The price increases that we see do more than offset the claims inflation on the retail side, very clearly. On the Solvency II ratio, yes, we have EUR 17 billion of OATs in our balance sheet, and that's the amount such that our solvency ratio is insensitive to the OAT spread widening.
Okay.
The next question is from Farooq Hanif, JPMorgan.
Yeah. Hi. I just wanted to follow up a little bit on. Actually, sorry. Apologies. I think you answered my question. Apologies for that.
As you wish. No more questions, Farooq?
No. No more questions.
Okay.
Next question is a follow-up from Michael Huttner, Berenberg.
I'm not going to be as modest as Farooq. He's amazing. Anyway, the MPS put option, I'd be really interested. The high NatCat, there's been a real swing from H1 to Q3. Does it mean that you'll be thinking more about buying more reinsurance going forward, particularly because it looks as if it's going to be really cheap? Then, just going back to AXA XL, there seems to be somewhere there's more confidence, but I'm not sure if it's on this side of the Atlantic or if it's on the other side. I just wondered whether you're muting the message which is coming from New York or whether it sounds that things are a lot better than maybe we had hoped, but I can't put my finger in. I'd be really interested. Then the final question, it's a standard one, really.
Given you've got so much solvency, 17 points coming at Solvency II review, et cetera, you must be thinking about deals, no? It seems weird, particularly if you do lose the MPS franchise. Thank you.
Thank you, Michael, for your additional questions.
Yes, thank you.
On NatCat, first, you know our NatCat load, which is 4.5% of premiums, and there is obviously volatility around that number. Over the last two years, we were below that number. What we are saying is that over the first nine months, we are above that number on a pro rata basis. As such, it does not mean that we should buy more reinsurance. More importantly, when you look at what sort of NatCat we had, some hail, some convective storm, and the impact of drought in France, taken individually, those losses coming from secondary perils are not significant, not material. You would need to lower your attachment point very significantly for reinsurance to have any impact. Clearly, reinsurers today are not willing to lower their insurance. They are more prepared to lower their attachment point.
They are more prepared to accept price decreases, but remain on primary perils and significant losses. I do not think there would be a market for protection for those secondary perils today. On your second question on XL, it is very much in line with what we said at half year, and obviously the dynamics line by line are slightly different on both sides of the ocean. Overall, precisely what Scott and his team are doing is to navigate from one line of business to another to make sure that we take advantage of the lines where profitability is good, growth is good, and so on. The mix can change from one period to another, but at the end of the day, we want to make sure that we have the right profitability and minimize the price impacts. On your third question on M&A, nothing new under the sun.
We always said that we could do some more M&A as we did over the last years with Prima, Laya, and the others. Certainly, we will have 17 points of solvency more, but that does not mean that we would relax our standards.
On MPS put option?
What exactly is your question?
How much will you get?
I wish I knew. It's not a fixed price, as you can imagine. I think the important point to have in mind, and that I already mentioned in past calls, is that it's going to be fair value. What I mean by fair value, it's as opposed to embedded value, because very often in those joint ventures, the price at which you sell your stake is the embedded value, and therefore the reflection of the enforced contracts. In ours, it's the fair value, which means that it also embeds the value of future new business. Then there will be a discussion either with BMPS or with the acquirer of BMPS, depending on how the offer from Intesa goes.
Brilliant. Thank you very much.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Pierre Chédeville, CIC Market Solutions.
Yes, good morning. Two questions on my side. First question relates to Germany. As you know, you have a reform regarding pension, and I wanted to know, in comparison with other players that have expressed on that subject and saying that it is very dynamic, if you were in that movement too, and how do you see that for your next plan? The second question you mentioned regarding the decrease of your margin, a joint venture in China, and I was a little bit surprised that this business could have such an impact, and I wanted if you could elaborate a little bit on what you do there and what happened there. Thank you very much.
Thank you for your two questions. On Germany, first, to put things in perspective, our strength in Germany are first and foremost P&C and health, where we have strong market shares. We are less strong on the life side, and therefore, we would probably participate to the pension reform to a lesser extent compared to some of our competitors. Nevertheless, we believe that is also an opportunity for us, and we do plan to participate. More generally, but specifically in Germany, the life insurance we sell is long-term life insurance to help our customers build savings for their pensions. That is very much in line with what we do in Germany as what we do in Switzerland, Belgium, and France. We will certainly participate in that. On the JV in China, it is a JV where we are minority shareholders. We have 28%.
It so happens that over the last quarter, the NBV went down. It is mainly general account savings, traditional ones, and a bit capital heavy. We are a minority shareholder, and we see that it had a negative impact on our NBV margin overall.
The next question is from Andrew Crean, Autonomous Research.
Morning. Just one question following up from Michael. As and when and if you do get proceeds from the MPS exit, will you use those as you have in the past to buy back stock?
Honestly, we'll see when the time comes. If we have some good M&A to be done, we could use the proceeds for that purpose. If we don't, yes, we could also use the proceeds for a share buyback to offset the dilution of our EPS.
That you're stepping away from your old policy of always protecting from earnings dilution from sale of businesses. Is that clear? Am I right in that?
Well, I mean, what we want to do is neutralize dilution. That is the main thing. If we can do it with M&A, it is simple. What we do not want to do, to put it differently, is sit on our cash and do nothing with it and just see that our earnings have come down by EUR 70 million, which is AXA MPS contribution to our earnings. It is either/or, but the principle is neutralization of the dilution.
Thanks.
Once again, if you wish to register for a question, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Excuse me, there is one more follow-up question from Michael Huttner, Berenberg.
Sorry about that, but it is such a great opportunity, and you are obviously in such a good mood. Thank you. Prima margin contribution, it sounds like from your remarks that retail is really hot, I would say. Maybe could you remind us the combined ratio on any kind of metrics you mentioned in the past? I have completely forgotten. I had in mind 80%, but that is probably too optimistic. On the debt, I had a call with somebody at MarketAxess who does a kind of platform business, and they were highlighting that, yes, there had been worries about, I think it was Oracle debt. Just to go back on your, not yours, traded debt, your private debt, I think the number was EUR 9 billion and very small line sizes. Could you remind us if anything has happened? Thank you.
Sorry, Michael, on your last question, I am not exactly sure to understand. What is your question? It is on private debt, but what is it exactly?
Private debt. Just to know if anything has happened since I think you did a deep dive this time last year, and I seem to remember the number was EUR 9 billion and EUR 8 million line size.
Okay. On Prima, what we disclosed in the half-year earnings, it is that the Prima's combined ratio was 87.5%. There is no reason to believe at this stage that it would be materially different. On private debt, nothing new. We have EUR 10 billion of private credit below investment grade. Overall, we have EUR 48 billion of private credit overall, with EUR 36 billion of investment-grade private credit, and that is mostly mortgages, infrastructure debt, commercial real estate debt. On the below investment grade part, which is mid-market lending, nothing new. We have a EUR 10 million average line, and therefore, a high diversification, plus a high level of selectivity in the businesses we lend to. Nothing new on that part.
Brilliant. Thank you very much.
Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.
Thank you very much for joining our call. If you have any further questions, please don't hesitate to reach out to investor relations. Thanks, and have a nice day.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may now disconnect.