Hello everyone.
Bienvenue à la.
Welcome to the presentation of AXA's 2023 annual results and new strategic plan for the period 2024-2026. This will as well be an opportunity for me to review the year's highlights and, of course, unveil the pillars of our next plan. I am here with Frédéric de Courtois, and I will hand it over to him afterwards regarding the details of the execution of our strategic plan, followed by Alban de Mailly Nesle, who will then outline our financial targets for our 2024-2026 plan. The members of the executive committee are present as well with me, and in our exchanges with your questions, we will also include them to see together how we can answer your questions. Look, let me start now with the first slide. As you know, earnings took place in a context that was very uncertain, and you can see this in any company.
With any retailer, the world has been uncertain and probably will remain so. Despite this environment, you notice that AXA achieved this year again excellent results, proving that the successful transformation of the group that we initiated since 2016 is definitely a success. Why is it successful? Well, first of all, our premiums are up by 3% to EUR 103 billion, and certainly this illustrates the very good momentum driven by our main business lines. Secondly, this growth is profitable. The underlying earnings are up by 6% to EUR 7.6 billion. In addition, you see that our underlying earnings per share rose by 8% this year, well above the target range of our Driving Progress plan. All of this is taking place with a very solid balance sheet. We reached a solvency ratio of 227%, up by 12 points.
These yearly results do demonstrate once again our ability to deliver a solid performance, which is really fully in line with our objectives. I am very proud of this work that has been carried out and was clearly done by our teams, and we will go now into further details in a few moments. I'd like to thank again our teams, our agents, who together were successful with this beautiful performance. Now, if we were to underscore two companies that are really key in regard to these earnings, it's clearly AXA XL and AXA France. The profitability of AXA XL is excellent.
We see that the underlying earnings are approaching EUR 2 billion, and I know that at the time when we announced the transaction with XL, there were many questions around this, and hopefully, I hope that with these results today and with the integration of XL that has been successful, we have put aside these questions. Now, AXA France, on the other hand, did confirm its position as a leader. Its activity is growing despite the fact that AXA France has been working in an environment that was not easy. You will recall the riots last year. You will recall as well the climate-related events in 2023. The year was very demanding for AXA France.
So despite these impacts, AXA France was able to increase its results by 9% while being capable to pay out EUR 450 million claims, in particular for weather-related risks, and with customer satisfaction, which is on the rise. In particular now, I would like to extend my thanks and salute the work of the teams and agents who worked really hard in a challenging environment and were able to make this result a real success. Now, if we now take a look at these various lines in details, I said that our premiums are up by 3%. It's a good momentum underlying each business line that you can see here. Let me start with property and casualty. It's up by 7% and EUR 253 billion.
And truly, this is a business line which is key, and we are the largest insurer for companies in the world and a major one in Europe for retail risk, and we can see that our development strategy, on the one hand, which is growing in these business lines and serving better the needs of our results, and on the other hand, we have a major pricing discipline and has led us to this beautiful 7% growth of our earnings. Now, on the second segment, which is life and pensions, which remains significant for us with about 1/3 of our results and in terms of earnings, in this case, we are up by 1%, and once again, very much driven by protection and certainly as well by life and savings products, which are capital light.
This is a segment which for us remains really vital, and certainly due to the fact that the needs among the population in regard to protection and pensions are still substantial and will be growing in the future. The third major business line is health with about 16% of our revenues. You can see here that the context in this business has been challenging now following an adverse environment in the United Kingdom, and this is a reason why we see a decline in our earnings. In addition to this adverse account in the U.K., we decided not to renew two major group contracts that account for this 7%. If I strip out these non-renewables, we see 7% of growth. In other words, this business line, which for us is significant as well, remains a business line. Well, apart from these non-renewable contracts, it's actually increasing the results.
So then we have the asset management business line, which has also been working in a challenging environment with high volatility in the markets and certainly an increase in interest rates. That is, assets are down, and here we see a slight decline. However, it's important for us to continue on our path, especially with a growth-related strategy in alternative assets such as real estate or private debts. So you can see all in all that AXA is extremely well positioned, and certainly AXA is very well balanced. We have about 50% of our business with commercial clients and 50% with retail clients. And underlying all of this, there's a geographic diversification that is such that we succeeded despite a context which remained quite demanding.
Looking now at the plan which is ending soon, which is called the Driving Progress Plan, we can see that these are very good results for 2023, and they certainly contributed extremely well for the end of this Driving Progress Plan because, as a matter of fact, we reached or we outperformed in most of these results. If we take a close look now at our underlying earnings per share, they are up by 9%. In other words, that's two points above the top end of our target range. In this case, we did outperform. Looking now at the second target, that is the cumulative cash remittance, we are at EUR 2.4 billion higher than the initially forecast, and it amounts to EUR 16.4 billion. Now, the solvency ratio, at the time, we were considering a target of 190%, 190%.
Now, at the end of this plan, as a matter of fact, we are reaching 227% and once again well above our target. Finally, the return on equity, the ROE, is at the top end of our target range of 13%-15% with 14.9%. These results testify again to the great collective efforts that we have all made together in an AXA transition which has been deep since 2016, and we are reaching now the end of this major transformation and this new AXA because once again, the company is called AXA, but behind it and within it, there's completely different things compared to 2006. This new AXA is also the base for our future successes. What has been taking place since 2016? We sacrificed. We simplified our organization. We focused on fewer geographies, but we focused on major market shares.
So we have a geographic mix which is better focused but well distributed. Secondly, we switched our exposure mainly from financial risk towards technical risk, especially the acquisition of AXA XL. Which testifies to this, and you also noticed that the integration has been a success. The integration of AXA XL has been a success within AXA Group. Looking now at the current environment and what it means for our plan, we can see that AXA today is well positioned. Look, I think that the current environment that we have been seeing for the past three years or so will remain at the same level of volatility and uncertainties. We succeeded now for three years to perform well in a challenging and volatile environment, and I'm confident that we will continue on this trajectory. So why do I feel confident?
Well, firstly, as I mentioned before, our business mix is diversified in terms of the business lines, but as far as our geographic footprint goes, in every geographic where we are, we have significant positions that are solid, whether in France or in Europe, but also in emerging markets where we focused, by the way, on fewer markets, but in the markets where we are, we are very strong. And lately, we were able to adjust our range of products, our service offer. For example, today, if we talk about climate change, where very often the question that is raised, is the client insurable? Yes, it remains insurable, "provided that we promote far more promotion and help our clients with protection." This is why AXA France, at the start of this week, launched a significant initiative with the Green Cover. We will talk about it certainly later on.
What I see, what AXA Climate did with 200 scientists, experts in the climate to help our clients be better protected against the next storm, this is the direction that we are taking and must take. Beyond this question that relates to environment, as I underlined before, AXA today is also a perfectly balanced business model, and this model is very specific, very unique. You don't find any competitor who holds the same profile and the same portfolio. With regard to commercial lines, which represents about 50% of our volume, we today are the largest insurer in the world for commercial lines for their physical goods such as buildings and plants, but also for employees. Secondly, with our tighter footprint, we are one of the leaders in EB in commercial and retail business, and we are very strong in life and health.
And this is where precisely our business, which is about asset management, goes well in line with our leadership in Europe because in the life insurance business, in the pension insurance life, it's very important to have a good pool, but also a good manager for financial products for our clients. Finally, if we now look at AXA today, it is also a company that has strengthened its commitment towards its employees because what is insurance about? Well, you buy a promise, and you buy a promise from someone or for someone who's a human being. So this is why it's very important that the commitment of our employees and the support we provide in the professional life of our employees is very important. And so we launched, under leadership of Karima Silvent, Group Human Resources Director, we have program We Care. We underlined significantly the care aspect.
In other words, how can we help our employees to remain committed and continue to get trained in this world which is constantly on the move? Secondly, AXA has always been a company highly committed when it comes to the weather and wants to remain a leader in regard to climate transition. You noticed that you were the first at the time who moved away from the coal industry, and since 2015, we have invested $26 million into investments in order to really fight against global warming. And you also noticed that for the first time, we have also published our decarbonization targets for some of our property and casualty insurance portfolios. That is, as an investor and insurer in the fight against global warming, is significant, substantial, and we remain so over time. And our philosophy is not to penalize.
It is to provide support to the companies and the retailers in this climate transition. This is what I have just mentioned for AXA France. The question of green, the Green Cover follows this particular spirit, and this commitment in society at large is truly speaking our philosophy and at the heart of AXA and has been so for 40 years. This question of sharing the value among the stakeholders is really key for us, and we want to make sure that things are fair and balanced. Now, if I start with our employees, our people, we are certainly a major employer in France and around the globe with EUR 8.6 billion in salaries and bonuses around the globe. In terms of recruitment, we are extremely active, and we will remain so.
It is also important to do some nearshoring and offshoring in order to find the right skills. But if ever we feel like making a major growth bet in the next plan, we need to continue to hire. Now, regarding our customers, you can see EUR 50 billion in compensation, certainly in the tough and challenging moments, as spoken before, like the climate changes and the riots. It is very important to remain close to our customers and help them. And certainly, when it comes to the support we provide to companies, we are insuring them and we are investing. Of course, we are a major contributor in terms of French taxation and around the globe with about EUR 12 billion in taxes.
AXA is a company which remains highly committed but also has major shareholders, and this is why we certainly make sure that the shareholders' side is taken care of with a dividend which is up to the progression of our earnings, but also at the level of the expectations compared to our competitors. I'm very happy to notice that 30% of our employees are also shareholders. So this gives us a good basis for the future, a good foundation. Let me talk now on the next chapter of the group, which is the 2024-2026 plan, which is called Unlock the Future. In other words, it is an ambitious plan. It's a plan that is focusing on growth. It is focusing on innovation, and certainly a plan which aims to invest. So what are the dimensions and the pillars of such a plan?
Well, first of all, it's about accelerating organic growth. We have a beautiful platform with AXA today. We have created a new AXA, and now in the next phase, it's about speeding up even further organic growth. Second item, we want to continue to shore up our excellence not only technically but also operationally and certainly with the new technology means. And thirdly, we want to further assert our role at the heart of society at large. Now, how do we want to go about this? In regard to growth, we will certainly be focusing in areas where we're not present yet. We want to focus as well on more recruitment investments, and Frédéric will come back with further details in a little while.
Now, in terms of technical and operational excellence, as I said, the use of data and the use of technological means, in particular artificial intelligence, will give us the means to do better. In other words, better pricing, better manage claims, and also better manage customer service through automation. Now the third pillar, it is how can AXA remain and become even stronger when it comes to society. It remains a major issue. I said we will continue our efforts, with AXA Climate, on the climate and also with the Green Cover, this, as I mentioned, for AXA France. But also, we want to come up with a new chapter of our societal commitment with inclusive insurance for more modest clients and SMEs. Many large part of French people either can't afford to buy insurance or are excluded.
We want to start in France with a new range of products to take care of such needs. After that, we want to offer that in European markets to confirm and establish the fact that we are committed to go even further with our next plan. We are setting ourselves once again ambitious financial targets that go beyond the targets of our last plan and which are characterized by the fact that now we want to Unlock the Future. In other words, take this beautiful AXA company and do better and do more. How do we go about this with underlying earnings per share, which we want to reach between 6%-8%? That's the target range and the target return on equity or capital between 14%-16% and also cash remittance exceeding EUR 21 billion by 2026.
This requires definitely investments, and we certainly have planned investments by more than EUR 2.5 billion over the next three years. Now, in technology that I mentioned, but also in the growth area because growth, after all, requires investments. Today, you have seen we also offer an attractive capital management policy for our shareholders. This discipline and the operational performance help us to propose a dividend that is higher and to launch a new share buyback program. And to reinforce this payout, this distribution plan will stick with us for the next plan. Frédéric will now go into the specifics, what this plan means and how we want to execute it. Over to Frédéric.
Thank you, Thomas, and good morning, everybody. Thomas talked about the ambition of our plan. Today, I'm going to talk about the implementation of the business. The starting point, as you understood, is excellent.
Our plan is not a revolution. Our plan is an evolution and an ambitious evolution or change. It is based on a portfolio of initiatives that is extremely ambitious. What is the starting point? It's a franchise, and as you can see, it's excellent. You know, three businesses that I will quickly review. The first is commercial insurance with $35 billion in premium income. That means very large corporations, multinationals, and including small businesses, and includes very small businesses, insurance of infrastructure, and so on and so forth. The second business is health and employee benefits. As you know, that coverage of employees in a company, in other words, benefit schemes and health insurance, a business line in which we generate $20 billion in premium income, and then afterwards in retail insurance, which we underwrite in some 20 countries with about $42 billion.
And if we look at our position in that, we are probably, there aren't any clear statistics or official statistics, we are probably number one in commercial insurance at $35 billion, which is by definition a global business that we do in every country. If we look at health and employee benefits, we are clearly number one in Europe in health insurance, and we are probably number one worldwide, excluding the U.S., in EB. In individual health and individual insurance, retail insurance, we are generally in the top three in our main markets, which are, as you know, Western Europe, Hong Kong, Japan, and a number of emerging nations. Thomas, on the following page, talked about the five pillars of our plan, three objectives, three priorities, and two resources. As you can see on this page, I'd like to emphasize two messages.
The first is that our plan is really a plan of investment in our core businesses, which is insurance and asset management in countries where we already operate. So we don't mean to plant the flags in new countries. We are focusing on our core business lines. The second message is that the major novelty of our plan is to scale. I was trying to find a better way of saying scaling up. So scaling up what we do, it's easy to have use cases and pilot tests and what have you. The whole point is to put it on an industrial scale. And the aim of this is, in particular, to do this in technology and technical excellence. I will quickly review the five pillars of our plan, starting with the pillar of accelerating organic growth.
We don't have an objective because we're not there with targets for premium income, but we do have an ambition, is to increase premium income in the next plan by 5% per year. In general, we believe we can grow P&C commercial lines beyond GDP. It's, in other words, something that grows faster than GDP. Same thing for employee benefits and health. So outperform, therefore, GDP growth and growth in line with GDP for retail insurance. That's the general aim. What we've done since then, we worked in 2023 on a portfolio of initiatives of organic growth. And today, we have a portfolio of 100 initiatives to accelerate growth. These are sometimes local initiatives, sometimes transversal ones throughout the group. So just to mention a few, in commercial P&C, a very important initiative is hedging of ETIs, of small and medium-sized businesses. Why very small ones?
We've got a very good position with AXA XL, and we've also got a very good position on our markets in small businesses. In very small companies, we worked out that we had a good position only in four countries: France, Belgium, Germany, and Switzerland. Our aim is to extend this business to other countries in Europe selectively and selectively in the U.S. The project started in 2023 and is a very ambitious one. We think we have everything we need to succeed. We know the business. We have the ability to propose, and that's very important for this global coverage. I think we have all the wherewithal to do this and to succeed. A second major growth point is all the new risks lines, the risks of the 21st century. Now, that in particular is cyber insurance and the energy transition insurance.
For an insurer, it's terrible because we don't have any historic data, and insurance means pricing based on historic data. We decided to be bold, to invest, to create centers of expertise, and learn gradually to acquire and expand on cyber, where we're already one of the top three insurers globally speaking, and better cover the energy transition in employee benefits and health, which is also experiencing strong growth. Our major initiative is to develop employee benefits for small businesses. Generally, employees of large corporations are normally quite well covered, and smaller businesses have far less good coverage. We decided to invest in this, and we have a tech company, an internal tech company that's called EB Partners that develops tools, technological tools, and services for HR divisions in large corporations and small businesses.
And for this, and we're already basing ourselves on this, we get to use it to expand our small business market. In retail P&C, we have three major initiatives. The first is to expand our proprietary distribution network, our agents and employees, which is quite new because we used to focus in recent years on improving productivity. Here, we're focusing on both productivity, and I'll get back to this, and also in the volume. In other words, we want to increase the size of our proprietary network of agents and employees, and we are strongly committed to the idea that this is fundamentally the best investment we could make. The second initiative in growth is still to improve productivity. And once again, artificial intelligence will help us. In the previous plan, we discovered we could sell without physically meeting the client because we had no choice.
COVID forced us to do this. Electronic signatures, Teams, Zooms, all of that. The next phase, however, is the phase of artificial intelligence to help our networks, our networks of agents and employees, to be more productive. The third major initiative in retail is life insurance and savings, which remains a strategic business and a major opportunity for us. We are very powerful in these fields in France, in Japan, and Hong Kong, but we can always do better. We face major opportunities for growth in Belgium, Germany, Switzerland, but also in Asia. We decided to invest and accelerate growth in life insurance. The next chapter is to enhance technical excellence, which is both operational and technical. In technical excellence, I can mention three issues. The first is that we're very focused on AI, tech, data, and satellite photographs.
All these new technologies now have the maturity for us to improve our technical excellence and pricing, along with the coverage that we offer our clients. The second major issue is better coverage of natural catastrophes. It's clear that there are more and more of them. It's absolutely clear. It's a fact. It's a given. It's a threat. It's also an opportunity. We have everything we need to cover natural catastrophes. We have an internal model to measure these cases, including the two market standards. We have an underwriting tool to ensure a consistent underwriting of natural catastrophes. We are investing in AI and satellite imagery, and we will continue to insure natural catastrophes. The third issue, we want to invest and further develop more services. Yeah, I talked about AMP, EB, and health, but a quick word for commercial insurance.
We have these major ecosystems that we call the Digital Commercial Platform. It's an ecosystem of services for companies that has a very promising start and is part of one of these initiatives. For us, it always means service to companies and more prevention. In operational excellence, again, three major issues. Firstly, investing and concluding the fundamentals, and one of the major steps is the completion of our transition to the cloud by the end of our plan in 2026. Second major issue is to automate all simple tasks that are specifically the tasks where we find it difficult to hire. So automate those. That is vital to us. The third is, as I said before, the scale-up of all our use cases and pilots in AI and data.
We have 400 experiences, experiments, and pilots in the group that are already operational, but we decided to further continue with those 400, but select 17 of them that had a potential to be implemented throughout the group, and we will roll them out throughout the group in the next few years. And moving on to the next pillar, which is Thomas mentioned our role in society. I'd like to remind you that we have a fantastic purpose, which is a mission statement to act for human progress, and we want to be faithful to that purpose. That's every day in our business, so to speak. But in particular, we have two extraordinary initiatives that I'm going to describe briefly. The first is Inclusive Insurance.
What we call Inclusive Insurance is insurance of people who have low incomes, insuring people who need even more insurance but don't have the means to get the right insurance coverage. It's not a new business for us because some years ago we launched in emerging nations. We have a business unit that focuses on Inclusive Insurance that's called AXA Emerging Customers, and we've already got 14 million customers in these emerging segments. The major novelty for us is that it would be useful to do this in mature countries, so primarily Western Europe. We decided to start off in France and then extend it throughout Europe, and you will see new offerings this year. It's an issue of product, pricing, and distribution. And to take the example of France, networks will be mobilized about this. It could be Direct Assurance, agents, and employee networks.
That, for us, is a major initiative in the next plan. The second major initiative, which is nothing new, is what are we going to do with the climate transition? As you know, we've already been very active in our carbon footprint for our portfolio of clients. We've done a lot already. The new thing here is we want to expand it along two axes. It's to offer, firstly, more services for adaptation and prevention. I talked about our commercial services. I've talked about AXA Climate. Thomas talked about the green guarantee of AXA France. That's a first access for growth and expansion. And the second, and I talked about this when I was talking about commercial lines, it's ensuring or protecting the energy transition, which is something where corporations and commercial lines find it difficult to find a partner, and there we have a very legitimate position.
Final chapter, very briefly, which is something for men and women. I'm used to saying that an insurance company is people, technology, and money. That's an insurance company. We don't have factories. We don't have patents. And I think the biggest challenge facing a company like AXA in the next 10 years is the people issue. It's the men and the women in it. And that's why we have a strategy that is ambitious with three chapters. First is talent management and culture, where the major challenge is how can we continue to attract young people and retain them, and how can we retain our seniors and ensure that they impart their know-how to other people in the company when they leave, when they retire. That's the first issue. The second major issue is the increase or the development of skills, skill sets.
As I said, insurance has been profoundly changed by AI and data, and we have to improve our team skills and invest in this issue. And finally, the idea of D&I and care, which is important in itself and also important to attract and retain talented employees. Conclusion, therefore, I believe, but I'm completely subjective, that we have a good plan. I'm convinced that we have a good team and a genuine one, and we have a motivated team. We measure client employee satisfaction twice a year and see what it says, and it's at an all-time high. We're at a score. The NPS is very high. We can do even better, however, but it's very encouraging. And finally, we have in our team a very good track record because we've achieved or exceeded the objectives of our previous plan.
That makes me very confident about the implementation of our next plan. Thank you.
So good morning, everybody. Now I'm going to present what Thomas and Frédéric talked about in the plan, how this will be reflected in our figures in the next three years. Before looking at the future, it would be interesting, as Frédéric referred to before, to look at our track record. And if we look at our underlying earnings since 2016 in this slide, you can see this underlying earnings trend has grown at an extremely regular way from the millennium until 2023, with the exception of 2020, which is COVID-related. That shows our ability to enhance our margins year on year, but also to manage volatility and also, in particular, natural catastrophes. If we look more specifically at the figures of 2023, full-year earnings amounted to EUR 7.6 billion. It's a 6% increase.
It's in line and even above the guidance we initially issued at the beginning of last year with the passage of IFRS 17. Everyone was a little bit lost. We said we'd do over 7.5 in underlying earnings, and in fact, we got to 7.6 in underlying earnings, our net earnings that have to be compared to IFRS 4. And I'm sorry, in the next few slides, I'm going to switch between IFRS 4 and 17. Our net results, our underlying earnings, compared to last year rose by 10%, which is a fine performance driven by all our business lines and, in particular, the P&C earnings at EUR 5 billion, which was up by 14%. If I look at solvency, it amounts to 227%, a very high level, up by 12 points over the end of 2022. And what you should retain from these figures is two things.
Firstly, we generate an awful lot of solvency every year. Last year, it was 29 points in solvency, so we gave a range of 24-31. So we generate a lot every year. Obviously, we give an awful lot back to our shareholders through the buybacks of shares and dividends, 22 points, but we still generate a lot of solvency year on year. Another thing to retain are the +12 points that you can see on the management overlay that we've massively reduced our own risk and our exposure to interest rates. In reducing these financial risks, we've reduced our EOF, and we've improved, therefore, our solvency margin. On this slide, you can also see the cash amount that we remit from our entities. As you know, it's a point that we emphasized and have been doing so for some years.
Our ability to remit cash is also a key factor to redistribute to our shareholders. But I will insist on this, and this is done after the investments we allocate to growth and technology, not at the cost of these investments. So that's the past. Now let's look at the future in our plan and growth that we are planning for by business line. So in P&C, we believe we can expand our underlying earnings each year by 4%-6%. What are the drivers in that? The first, which refers to what Frédéric said and Thomas said, is growth in our earnings. We believe we can increase our earnings by 5% with a dynamic that's slightly different between the commercial and retail insurance lines.
In commercial insurance, it'll be a lot to do with the development of our offering in the intermediary sector and also in supporting new risks, as Frédéric mentioned. Whereas in the retail aspects, there we're talking about productivity gains and growth in our distribution networks that will drive the earnings growth in these sectors. We also believe that we can continue expanding our margins and, therefore, reducing our combined ratio or loss ratio by two points. How will we do this? By using the techniques that we mentioned before with better pricing, better claims management, better understanding of our risks, and in particular, thanks to the technology that we've mentioned before. It's also interesting to point out that we believe we can increase our margin by two points, but we've also increased what we plan to pay out in natural catastrophes each year.
We plan to pay out four points in the combined ratio in natural catastrophes, and we'll go up to 4.5 points. Why? Because, quite simply, we can all see that the secondary dangers that don't really deserve their name, in other words, drought, flood, hail, will increase. We saw in 2023 and in previous years it is reasonable and prudent to think this would be a stable phenomenon, so we're increasing our natural catastrophe budget. We will continue to continue our productivity gains as we've done in the past. A more technical aspect, as you know, in IFRS 17, we have to help with our claims. We have to book our claims differently, so we discount these, the claims, which you'll find in our P&L. In the years to come, the discount will affect our earnings for EUR 500 million net in our net financial income.
That's a purely accounting mechanism, but we have to take account of this, and you'll see in the years to come. Despite all of this, given the growth of our income and the growth in our margin, we do plan on a 4%-6% increase in P&C earnings. If I move on to life insurance, there again, sorry for all the IFRS 17 jargon, but for everything to do with savings, just to make this simple, we are creating a PFM. A PFM is a reservoir of our future profit. We will give up some of this each year, and we believe that we can increase this by three points, 3%, sorry, each year, at least. But there is a whole part, EUR 15 million in income, that equates to health and benefits schemes, therefore, and employee benefits.
In this part now, we believe that we can increase our income by 6% in top-line growth, thanks to initiatives that Frédéric managed to describe, once again, by increasing our margins. We believe that in reducing the EUR 15 billion, we can, in fact, improve our combined ratio by three points. Some of this can come through in the U.K. As you know, we suffered in 2023 the changes from the changes in the NHS. That's part of the three-point issue, but also an improvement in margins in benefits schemes and health that we plan on. Therefore, we plan that our net financial results would be stable. That means that, globally speaking, we see an increase in our earnings in life and in savings of 4%-6% in asset management. As you know, it accounts for approximately 5% of our earnings.
When we look at 2023, there was an awful lot of new inflows of about a third, about EUR 9 billion, half of which came from liquidities that we call core, and the other half in alternatives, real estate, private debt, worth about EUR 4 billion. We think that this net inflow should be reproduced in the years to come, more or less, and should lead to a regular increase in our earnings and underlying earnings of about 4%-7%. In the holding part, there'll be a slight deterioration in the cost of this for several reasons. Firstly, it's the holding that's carrying the debt. With the increase in interest rates, of course, debt will cost a little bit more. That's the first point. The second point, we are investing in technology, in growth in our entities, obviously, but also in the holding, and that means increasing our expenses.
Third point, the OECD implemented a new tax system that would ensure that all countries pay at least 15% corporate tax. That'll affect us a little in Ireland, in Hong Kong, and Bermuda, and that'll cost us a little under EUR 100 million. And therefore, if I move on to our global financial targets, our underlying earnings per share, given what I've said about our earnings, should increase by 6%-8% per year. The profitability of our underlying return on equity, we gave a target of 13%-15%. We ended up at 14.9%. We will increase this objective, this target, to 14%-16%, which reflects two things. Firstly, we plan on increasing our margins, but also the fact that our required equity has fallen, given what I've said for the reduction of our risks and financial risks in particular.
We plan to increase EUR 21 billion in cash from our entities. We set EUR 14 billion in the previous plan. Now we're talking EUR 21 billion. It's a very significant increase. And finally, we have a capital management policy that we are slightly changing. We are saying that, in global terms, we will redistribute to our shareholders 75% of our results, of our underlying earnings per share in the form of dividends and in share buybacks, in the same way that in results, there are investments we have in growth here in the 75% we are not distributing. There we have capital investment for growth that we are allocating. And you have to look at this as a balanced measure between what we give back to our shareholders and what we invest in future growth. And I'm going to stop there.
Thank you, Frédéric. Thank you, Alban.
To sum up, our financial earnings for 2023, as you have seen, are very solid and have shown once again a major commitment for the company, society, and our employees. Secondly, you noticed that we ended our Driving Progress plan with a great deal of success. The four financial targets have been achieved or even exceeded. Thirdly, the deep transformation of the plan that we initiated in 2016 has been successful and has been done. It is our foundation for the next plan. You also noted that we're launching this new plan today, which is called Unlock the Future, based on three pillars: speeding up growth, shoring up our technical and operational excellence, and certainly assert our role as a responsible player in society.
The key to this success, as you noted, are the skills and the well-being of our people, our employees, as well as a disciplined management of the company and of our capital. I'd really like to take this opportunity to express my gratitude to all the AXA employees and our agents for their commitment towards our customers and towards society at large, because this is not something that goes by itself. It's a major collective effort, which is based on the trust of our shareholders, based on the trust of our customers. This is something that makes me extremely proud. You have noted the role of the insurer has completely changed, and it decided to join the insurance business nearly 20 years ago. At the time, the insurer was the one who was paying invoices.
And you've noticed now in our presentations and in the major debates that we have that the insurer has become a partner of their customers and of society. We're very proud to open up now this new chapter of this new plan and together succeed again in completing this plan and also highlighting the major investment and the major involvement of AXA in society. Let's now switch to your questions, to the Q&A session. I invite my colleagues from the management team to join me on stage.
Who would like to start with the first question?
Allez-y.
Go ahead. Microphone. Maybe, could you start again? We couldn't hear what you said. Sorry. The interpreters do not hear anything.
[Foreign language] J'aimerais que vous me précisiez un petit peu quelle est votre politique de couverture des risques dans les hydrocarbures, et notamment les hydrocarbures non conventionnels. Ça, c'est ma première question. Ma deuxième question concerne l'assurance vie. J'ai cru comprendre que l'assurance vie était.
Sorry, the translators are not hearing anything, and the technicians are aware of this now, and they're doing their best to address the issue. We'll be back with you as soon as possible.
[Foreign language] Politique en ce qui concerne l'épargne et l'assurance vie. Merci.
Thank you for both of your questions. I will answer the second question, and Ulrike will answer the first question on our underwriting and investment policy with regard to LNG. Life insurance has always been and will be a major pillar of AXA. It represents a major part of our company, and we see, as I said before, that the needs of populations of customers in terms of retirement and protection will keep growing over time. This is exactly what we've been doing in the past few years. We certainly changed our life insurance mix. At the time, we were highly focused on pure savings, in other words, in competition with many banks, many asset managers. We've changed that mix towards more pensions and retirement because this is our core business.
In other words, how can we help our customers manage the length of our life? We've changed this. And secondly, we also changed our mix, which is more skewed towards more balanced products in terms of cover, guarantee, and upside in the markets. And it is this move which helped us change the mix and the direction of the products, which created the new foundation also to generate growth in life insurance, certainly in Europe. All markets, especially the French market, are very significant markets. But remember as well that in Asia, we are a major player as regards life insurers, especially in Japan and Hong Kong. Second question now.
The answer we had two questions on this, one regarding LNG in English. We don't have any exclusion policy regarding this kind of infrastructure. Regarding shale gas, we are excluding insurance to companies that draw 30% of their oil and gas production based on shale, and we have been applying this for quite some time. So these are the answers that we provided. Just to give you the context, we have less than 1% of our investments, which are in fossil investments, and we keep reconsidering our policy constantly. That's the spirit about supporting ecological transition. Next question.
Hello everyone. I'd like to know what about the cost of Nat Cats in the last quarter, and specifically in France? You're not providing any solvency targets for your 2026 plan. Could you tell us why and possibly give us a few clues on that? Likely for the 2026 plan, do you have a quantified number in terms of cost reduction? Can you tell us more as well about your offshoring and nearshoring projects? Does it entail the fact that you will have more net hirings in those countries than on your mature markets, and to what extent? And one last question now regarding France, where the business was negative last year, and what do you foresee for the coming years?
Now, there are five questions now, if I counted properly. Now, the first question was about the Nat Cat cost in the last quarter.
Alban de Mailly Nesle, this is a question for you. Now, the second question was what about the solvency to target? Alban, also that's for you. Now, the third question, what about the cost cutting for 2026? That's for you, Frédéric. Then the offshoring and nearshoring topic, that's for Alexander. Would you like to answer in English, and then we'll translate you? And then for France and the development of premium. Guillaume Borie, Alban, over to you.
Regarding Nat Cats, look, I cannot give you the figure for the last year. I think the figure, which is interesting to note, is that when you look at the French and European Europe scope, the cost of Nat Cats was two points of our premiums, and it was nine points of our premiums in the second quarter, which proves precisely the sharp seasonality that we encountered.
It impacted chiefly Italy, Switzerland, and Germany, and to some extent, France. With regard to solvency now, well, as a matter of fact, we do not provide any target for a simple reason. Look, we had said 190% for the previous plan, and now we stand at 227% plan. We constantly got this question, when will you give back the surplus? Well, there isn't any. We're very happy with the current level of 227%. What we're saying for the next plan is that we are very happy to operate at this level, which may vary slightly, but the key point to take away in this case is, as I said earlier, we are generating a great deal of solvency, and we have reduced to a large extent the sensitivity of our solvency, especially to interest rates. We cut them by about 60%.
In other words, our level of solvency is reasonably steady, so we are happy to operate at that level.
Thank you, Alban. Frédéric, regarding costs,
We don't have any cost-cutting targets in absolute terms, but we have goals to increase productivity. Why is that the case, especially given the inflationary context that we are focusing on productivity? You will see that in the presentation to investors this afternoon, we are providing a figure. We say that we want to reduce by 0.5 points.
The expense rate excluding fees, excluding premiums, which would move to 3.5%. In other words, we are growing our business faster than our cost. To give you an example in this regard, and this is one reason we are focusing highly on automation, as I said before, so we intend to automate a great deal in the next three years.
If you look at all of what we call operations, other people would call it back office. I don't like this word, which represents 40% of our headcount. Based on our experience, automation should help us gain 3% of productivity per year, to give you a rough estimate. That's a ballpark estimate. We want to increase productivity. That's our target.
So that is basically the number of tasks, so to speak, carried out by an individual. Now, with the issue of offshoring and nearshoring, I think the question also concerned hiring. I'll ask Alexandre to start to answer that, and Karima, if you could add something about recruitment or hiring in English, Alexandre, or French if you want.
I'm trying. So first of all, we have done nearshoring and offshoring to service centers in India, Morocco, and in Poland for the last 10 years already. And today we have roughly 11,000 people working from these countries for us. So it's not new to AXA. Second, you have seen that we are, on average, hiring 17,000 people per year across AXA Group, and roughly 60% of them, of this number, is attributed to our core European markets. Third, you have also heard that we want to grow going forward, and it is increasingly difficult to find all the right skills in our mature markets due to retirement. It will be increasingly difficult to find some of the skills that we need. And you have also heard we're investing in technology. We're having initiatives on data and AI.
We have initiatives on automation, but also think about cyber defense, for instance, where we are struggling to find experts in all the markets where we need them. So for us, this is a very important initiative also to get capabilities and skills that are not so easy to find in all our markets. But that definitely means we continue to hire, but we will continue also to grow in our nearshoring and offshoring centers in India, in Morocco, and in Poland.
Merci, Alexandre. And perhaps on [Foreign language] jette un coup d'œil sur les.
Very quickly, if we could talk about recruiting and hiring in Europe, Karima.
Yes, Alexandre has pointed that out. We have a dynamic movement. I believe the growth strategy is one in which we need people for this. Last year, we hired 17,000, as Alexandre said. That's + 6% compared to the previous period. So we have 6,000 hired in France, and we are on the top hirers each year, with a lot of rehiring going through apprenticeships. So the strong dynamics will continue, in particular because in some business lines, we have a slight increase in our retirement departures. So it's very important for expert things, I'm thinking about actuaries, I'm thinking about underwriting, IT, to continue hiring dynamically. Yeah, these 17,000, as Alexandre emphasized, between 50%-60% are in Europe. We hire a lot of young people in all categories of age groups.
Of these 17,000, we include some of our markets, especially France, agents, and sales staff.
Nearshoring and offshoring, it doesn't mean replace hiring in France and elsewhere. It means adding to the hiring that we find with profiles that we just can't find in our classic countries. Guillaume, premium income, if there was a contraction last year. With all these investments, we'll have to invert the trend.
Yes, good morning, everybody. Good morning, Amélie. Thank you for your question. Firstly, I'd like to emphasize as a preamble, as you know, business in France, as reported in all the group's publications, includes an international segment that was very significant in 2022 in health, international health business lines.
In particular, as Frédéric and Alban pointed out in their presentation, we have proactively ended two very large international health policies that were accounted for EUR 2.2 billion in our gross written premiums for 2022. So you can see there's a very significant reflection of this change. I'm going to now comment on the growth in domestic business, AXA France, in France. AXA France business, we have +4% in 2023. That growth is sustained by all our business lines without exception. In P&C, we grew by 8% on the domestic market. In health, we grew by 6% on the domestic market. I would like to emphasize these aspects because in health and other lines, you can see in the publications, a global figure is the most impacted by that international growth. On the domestic market, we grew by 6% in health.
In EB, we grew on the domestic market in individual and retail and in EB. And in savings as well, we grew by 2% in 2023. So savings grew by the slowest rate, but we have returned to growth in the second half of the year, a change compared to the results you saw in the first half of the year, which also indicates our confidence in sustained growth in savings in 2024 because our distribution networks are highly committed to this development. That growth on the domestic market is maintained by what? By three factors. Firstly, for the first time in a long time, we've increased our distribution networks. That's the start of our next strategic plan. As Frédéric mentioned, we have an objective for the first time in many years to resume an increase in the number of distributors, exclusive tied agents for AXA France.
In other words, the numbers of people exclusively distributing AXA France products on the French market, which grew by 3% in 2023 and will accelerate this in 2024. The second factor for this that explains this growth is that for the second time in a long time, we've increased the number of individual clients in AXA France. The number there, in fact, amounts to 427,000 policies. That's a 10-year record for AXA France. And it increased our client base, our individual client base, which is already about six million people, by 2%. That's a central factor for future growth because, as you know, where our distribution networks, our exclusive ones, are very good is in supporting over time and in multi-policy holding. So there is a major growth, extremely strong growth factor.
The final factor is that growth on the domestic market that was sustained in 2023 will be further sustained in 2024 and is done under good profitability conditions. When I look at the technical performance in 2023 compared to our results, our technical results of the 2022 results, intrinsic performance, therefore, improved in the three main lines: P&C, health, and savings. Therefore, we can say we've got a healthy portfolio for the next plan. Does that answer all your questions? Thank you.
Moving on to the next question.
I just had a quick question, in fact, too, on the Net Zero Insurance Alliance. That was an important point that you left it. It was chaired by one of your members, I believe. Is it completely dead and buried, or could it lead to a new initiative at that level?
And again, relating to the U.S., how do you assess the election or the re-election, the possible re-election of Donald Trump this year?
I'll try and answer the two questions. The first is easier than the second. For the Net Zero Alliance, the alliance was founded at a time and was really driven by AXA in the sense that the Net Zero Asset Owner Alliance done in an investment to support the climate transition. We've also got to do in underwriting risks. And that's why we said we have to meet up with several global insurers to discuss the principles by which each entity underwrites risks. And so we can learn from each other what it means to support a climate transition as an insurer.
We worked well together and discussed the principles over two years until we received a letter from the 23 attorneys general in the U.S. where this meeting of Net Zero Insurance Alliance was not compatible with the principles of free competition. That was our first issue that we clarified with the European authorities, but we thought that the next step in that alliance would be for every company to publish their own ambitions, which is why we said that we worked well together for two years. We had everything we needed to go much further in the future. And now we said we should focus more on our climate commitments than in any legal battles we may have in the U.S., which is why we decided to withdraw from the alliance without giving up our climate ambitions.
Because, as you saw, only two or three weeks after withdrawing, we published our own objectives that are more ambitious than those you saw in the past. I was thinking that in Luthrand, we said that we pointed out that we wanted to remain a dynamic and very important contributor and a leader in the support of the climate transition. As for the U.S. elections, presidential elections, that is something which is still a long way away because people forget we still have nine months to go. I could see a lot of discussions about this. The only issue that might make me a little sad is that in nine months' time, we can still do a lot to have a spirit, an attitude, instead of thinking that the election is all cut and dried. I don't think that's the right way of looking at things.
Nine months is a long time. People have to be responsible to ensure that there are qualified candidates who can face the challenges before us. I believe and I hope that we'll see more activity in the next nine months before this election.
Yes, good morning. I have a quick question. There was a press article that was talking about your intention to sell some of AXA Partners in some European businesses. I just wanted to know where you stood with that and how is that part of your strategy plan that you presented this morning.
As you know, this morning, we never comment on rumors, which is why I shan't offer any comment there. It's clear that AXA Partners in itself is a company that is important for us because it is the service arm of AXA under the responsibility of Guillaume Borie. Perhaps, Guillaume, you might want to develop on what AXA Partners is and why it's strategic for us.
Well, AXA Partners, as you know, is a combination of three activities that we steer globally because there are scale-up effects on this business. There's insurance that's what we call credit lifestyle protection, travel insurance, and assistance business. Now, business assistance business is clearly very much in line with all our operations worldwide. So we work with AXA entities in each country, but it's about 60% of our activity. So that's 40% that's also done with other insurers and other companies that need assistance services, in particular, obviously, major leasing companies and motor construction or car vehicle construction activities. Now, that's something that we've seen in assistance and in travel insurance, sound development and growth in 2023, and it is, for those activities, quite strategic for us.
Perfect. Thank you.
Next question.
Guillaume Clément, just one question on asset management. Last year, as in the previous year, you're stating that the inflow comes from insurance groups, especially the savings issue. My question is, now how will this situation evolve in the next few years? Would you like to reverse the trend now given your will of moving towards third-party clients and more profitable assets?
Clearly, our asset management is a key pillar for AXA. Asset management is twofold. It is very solid in managing liquid assets such as bonds, treasuries, and on the other hand, equities as well. It's also a major player when it comes to managing alternative assets such as property, real estate, or private debt.
AXA IM serves AXA, and you are totally right with the transactions we carried out, especially with respect to the life insurance portfolios because we got rid of some of these portfolios so automatically. Therefore, the inflows at AXA are slightly more negative than it ought to be the case, normally speaking. So I had stated that the AXA transformation is now more or less completed. We have a new foundation now so that we can really focus on the scale-up, as mentioned by Frédéric. And this is why I expect new inflows that will be reversed. In other words, it will be more positive because no longer have many portfolio transactions. And secondly, I hope that the interest rate issue will become normalized. In other words, have fewer outflows from our clients when it comes to life insurance.
Now, on the front, on alternative asset management, we can see a sharp increase of our inflows because there we work a lot with third parties. And it remains assets that are very sought after by every institutional investor. We can take one last question.
Laurence Puget, in terms of asset management, there's a slight consolidation move in your industry. Can AXA IM be part and parcel of that move?
I don't know if there's a consolidation. I haven't seen anything so far. I mean, there's rumor that people seem to be speaking with each other. I told you before, I told Guillaume that asset management is a key business for us. And this is why today we are well positioned on the liquid part and on the alternative part. And certainly, with regard to the latter one, we are leaders in Europe.
In other words, today we are not actively seeking any discussions with others. But I'm not ruling this out. If someone comes along and offers a partnership on something that could enhance our position today, I'm always open. But this is not something topical. Thank you very much. Thank you. Thank you for your questions. I thank my colleagues for having answered. I wish you a very good day. Thank you.