AXA's net income down 39% to $1.65b in H1

Underlying earnings contracted 48% YoY over the same period.

AXA’s net income fell 39% YoY to $1.65b in H1, the company’s latest financial results showed. Over the same period, revenue dipped 2% YoY to $61.8b, pulled down by a 10% decline during Q2 and partially offset by the 4% growth recorded in Q1.

Income fell as a result of declines in adjusted earnings and the negative marked-to-market impact of invested assets, which were partly offset by a favorable impact from the change in the fair value of derivatives, and the non-repeat of the negative impact from the deconsolidation of Equitable Holdings, Incorporated (EQH).

Underlying earnings contracted 48% YoY to $2.24b, driven mostly by the property and casualty revenues, which dropped 72% YoY in Q2 mostly because of COVID-19 claims, according to AXA.

Revenue in the segment slipped 1% YoY on the back of a decrease in personal lines sales primarily due to lower new business activity during the lockdown periods across most geographies.

Meanwhile, revenue and earnings of the life & savings segment shrunk 8% YoY and 9% YoY, respectively, on the back of lower sales in France and in Europe. This was further exacerbated due to the extension of disability coverage as a result of the COVID-19 pandemic the decrease in annuities discount rate, according to AXA.

On the upside, the health segment’s revenue grew 9% YoY with growth across all geographies, whilst income grew 8% YoY. Revenue from asset management also rose 3% YoY, linked to higher average assets under management.

Further, underlying earnings per share contracted by 48% YoY to $0.88 (€0.75), driven by the decrease in underlying earnings and the impact of the deconsolidation of EQH.

Adjusted earnings were also down 51% to $2.3b (€2b), reflecting lower underlying earnings, as well as higher impairments in the context of financial market volatility linked to COVID-19, the report stated.

These decreases were in line with AXA’s previous published forecasts, noted Thomas Buberl, CEO of AXA.

“The group’s underlying earnings were €1.9b, down 48%, and were up 1% excluding COVID-19 claims and the disposal of Equitable Holdings,” Bubern noted in the press release about the group’s results. “Commercial lines were the most impacted, notably at AXA XL. The rest of the group was resilient, with the impacts from Covid-19 claims largely offset by lower frequency in motor and growth in health and asset management.”

The group has realigned its purpose to reflect on the role of insurance in providing protection tot societies and economies amidst the COVID-19 pandemic, he added. This is reflected on the group’s new purpose, ‘Acting for human progress by protecting what matters.’

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