PRINT PAGE

AXA - protection revenue strong, healthcare stable in 09

18 February 2010 Breaking News

AXA enjoyed a strong year in the UK individual protection market in 2009, while its domestic private medical insurance business witnessed more mixed results.

The insurer said that a 5% fall in revenue for domestic individual Healthcare business in 2009 was offset by a "modest" increases in UK large corporate and SME revenues and growth in its international business.

The insurer's results for the year show that revenue growth in Healthcare continued with revenues increasing 4% to £1,112m in 2009 from £1,070m in 2008. This was "largely" fuelled by growth in International markets, up £51m, particularly in the Middle East and Asia Pacific, capitalising on AXA Group's "strong presence" in these markets, it said, in addition to "modest" increases in UK large corporate and SME revenues, which rose 2% overall. However, AXA's UK individual Healthcare business saw revenues decline 5% due to the "difficult" economic environment.

Total General Insurance and Health underlying earnings in the UK and Ireland declined by 63% from £244m in 2008 to £90m in 2009 mainly due to a series of large exceptional items in General Insurance totalling £157m. These, as well as lower investment income, were only partially offset  by an upturn in underlying underwriting performance driven by improvements in both the loss and commission ratios. Together these factors increased the general insurance and healthcare combined ratio from 99% in 2008 to 102.2% in 2009.

Total P&C ((General Insurance which is AXA Insurance and AXA Ireland) plus Healthcare (AXA PPP)) gross revenues remained flat at £3,543m in 2009 compared to £3,545m in 2008.

AXA said its Protection business performed "strongly" despite the contraction of the mortgage market, with new business revenue (APE) up 15% in the AXA Protection Account helped by the launch in July of the new online underwriting capability for advisers. Sun Life Direct also had a positive year with revenue growth of 17% driven in part by the strengthening of its bancassurance distribution ties, AXA said.

In terms of distribution, Bluefin Advisory Services, the AXA-owned provider of provides financial advice as well as wealth management and corporate consulting services saw overall revenues decrease by 25% to £70m in 2009. AXA said this reflected "the strategic decision to dispose of the network businesses and to deliberately refocus towards fee based financial advice in readiness for the Retail Distribution Review".

Offsetting some of this decline was revenue growth in corporate consulting up 6% in difficult trading conditions, AXA said. Bluefin Insurance Group, which provides professional insurance broking and risk management services, saw revenues down 9% to £116m in 2009 and while all business sectors have been adversely affected by the market those most impacted include the property and SME sectors, AXA said.

Globally, AXA Group reported underlying earnings down 6% to €3,854m versus 2008, adjusted earnings down 8% to €3,468m and net income up 283% to €3,606m (on a comparable basis).

In the UK & Ireland, underlying earnings decreased by 18% from £288m in 2008 to £235m in 2009.

If you would like to share your thoughts on this story or any other issue email news@hi-mag.com