Insurer chief executive notes that the subsidiary still has the ability ‘to generate earnings totally in line with our objectives’
The commercial and reinsurance subsidiary of insurer Axa – Axa XL – has recorded a total 6% dip in its gross revenue for the first half of 2022 after the firm made a strategic decision to “reduce our exposure to natural catastrophes in reinsurance” by 40% this year, according to Alban de Mailly Nesle, Axa’s group chief financial officer.
Within its half-year financial results, published today (3 August 2022), Axa revealed that Axa XL had a total gross revenue of €10,719m (£9,007m) for the first six months of 2022, compared to €10,505m (£8,827m) for the same reporting period in 2021.
This breaks down into an €8,384m (£7,045m) revenue for Axa XL’s insurance business (2021: €7,415m) and €2,247m (£1,888m) for its reinsurance book, which marks a 21% decline on a comparable basis to the €3,003m (£2,523m) revenue Axa XL recorded for reinsurance in H1 2021.
Around €10,631m (£8,933m) of Axa XL’s total gross revenue for the first half of 2022 relates to its property and casualty (P&C) business - €203m (£170m) of this is from commercial motor products, while €10,429m (£8,763m) comes from non-motor commercial products.
Speaking during a press conference about Axa’s half-year financial results this morning, de Mailly Nesle said: “It’s important to isolate in our P&C business Axa XL Reinsurance, in which revenues are down 21%.
“That’s a reflection of our strategy to reduce our exposure to natural catastrophes in reinsurance. We are reducing [this exposure] this year by 40% and the drop in premiums at Axa XL Reinsurance is a reflection of this.”
Axa XL’s underlying earnings for H1 2022, meanwhile, amount to €688m (£578m) – compared to €619m (£520m) for the same period in 2021.
Regarding P&C at Axa XL, underlying earnings were €721m (£605m) for the first half of this year.
Thomas Buberl, group chief executive of Axa, said: “Axa XL [has] proven its ability to generate good results semester after semester.
“At Axa XL, underlying earnings [are] up by 1%. Half-year after half-year, our large risk management subsidiary confirms its ability to generate earnings totally in line with our objectives.
“Such performance, as always, has been made possible thanks to the loyalty and trust of our clients.”
Frédéric de Courtois, Axa’s group deputy chief executive, added that Axa XL’s combined operating ratio (COR) had improved by 0.3% between H1 2021 and H1 2022 too.
Insurance Times has converted euro amounts into pounds using an exchange rate of £1 = €1.19, which was correct as of 1 August 2022.