Axa beats first-quarter expectations

(Reuters) — Axa, Europe’s second-biggest insurance company, posted a better-than-expected key capital buffer measure in the first quarter, reassuring investors of its capacity to generate cash as it navigates a higher interest rate environment.

The group's solvency II ratio — a measure of its capital strength under EU risk measurement rules for insurers — stood at 217% at the end of March, up 2 percentage points from the end of 2022, driven by strong operating return.

“Solvency was strong at 217%, better than consensus estimate of 208%,” Morgan Stanley said in a note.

KBW and Jefferies noted that the company's new operating capital generation guidance for 2023, between 25 and 30 points for 2023, also beat market expectations.

The French insurer's first-quarter sales rose 2% from the same period a year earlier to €31.8 billion ($35.01 billion), as growth of its property/casualty policies offset a fall in revenue from savings products in France and Italy.

Revenue from property/casualty policies was up 5%, while life insurance policies fell, dragged down by a 9% drop in premiums in savings-related products.

The insurer said it expected to yield more than €7.5 billion in underlying earnings this year, up from €6.1 billion in 2022, under new restated 2022 figures after the implementation of a new set of accounting standards.

Axa confirmed its 2023 financial targets.