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PRESS RELEASE For Immediate Release - 05/14/2001
AXA Consolidated Revenues Up 4.3% On A Comparable Basis In The First Quarter Of 2001
Numbers herein have not been adjusted for scope and currency changes. Growth rates are on a comparable basis and, accordingly, have been adjusted for changes in scope, accounting methods and currency. PARIS - AXA reported today that consolidated revenues for the quarter rose 4.3% to Euro 20.6 billion compared with the year-earlier quarter. "The overall strength of revenues achieved in this challenging quarter validates the benefit of a diversified strategy designed to perform well despite equity market weakness," said AXA CEO Henri de Castries. "The engines that fire our business, demographics, pension and tax reform, and the need for financial advice, continue to have positive effects on our top line growth. Both geographic and business line diversity contributed to a solid quarter of revenues. The decrease in annuities sales in France and the U.S., the two largest contributors, was offset by solid performance in other geographic areas, especially the U.K. Belgium and Australia. Despite the drop in French and U.S. premium income both operations outperformed their respective markets. "Our Property and Casualty business benefited from higher rates across Europe in the first quarter, partially offset by our continued focus on stricter underwriting. The results were particularly encouraging in France, Germany and Belgium, three of AXA’s largest non-life markets." "We are becoming more optimistic regarding this year revenue growth, due to the recent stabilization of equity markets and continuing higher rates in our Property and Casualty markets said de Castries. While recent economic conditions have caused us to be vigilant on expenses, we have not pulled back from the aggressive implementation of our advice driven, open architecture strategy."
(1)Decrease in actual top line revenue number is driven by the disposal of DLJ which contributed Euro 3 378 million to Q1’00 revenue (2) LIFE AND SAVINGS Consolidated life and savings premium income rose 0.6% to Euro 12,386 million.
EUROPE France:Premium income decreased 9.8% to Euro 2,972 million, compared with last year’s record first quarter, which grew 57.4% as a result of maturing tax-driven products (PEP ..). Despite the decrease, this performance compares favourably to the overall French market, estimated to have declined 15%. Individual savings premium, which was 60% of overall premium, declined 18.9% but is up 27% over the first quarter of 1999. Group annuities declined 8.1% due to high single premium sales a year ago. These declines were offset in part by an 18% increase in Health and Disability premiums. Unit linked sales remained strong, representing 53% of individual Life and Savings premiums compared to 56% a year ago. United Kingdom: Total written premiums grew 14.5% to Euro 2,187 million in the first quarter of 2001. AXA UK’s life New Business Index (NBI) rose 28% in the first quarter of 2001, as compared with estimated market growth of 10-15%. In addition to new products introduction, expansion in the agency and IFA distribution channels contributed to the strong result. Overall life premiums grew 15.8% primarily driven by single premium pension products which surged over 50% compared with a year ago. Total pension premiums, which are 53% of total life premiums, grew 34% to Euro 755 million. This growth was driven by changes in tax law that caused customers to use carryforward contributions, as well as by rollover pension products introduced in the quarter. The introduction of new Individual Savings Accounts (ISAs) products including a new multi-manager product, contributed to a 39% increase in sales, significantly outperforming a steep decline in the overall market for ISAs. Premiums in the health business rose 5.6% benefiting from higher pricing. Germany: Revenues rose 3.7% to Euro 717 million. Pension reform continues to fuel a shift in product mix, as unit linked premiums grew 45% while non-unit linked premiums fell 7%. This strong growth in unit linked premiums, which still represents a small part of overall premiums, should continue due to the tax law changes. New product launches and rate increases continue to drive health premiums, which were up 14.5% to Euro 149 million, compared to estimated market growth of 5%. Belgium: Premium income was Euro 457 million, up 75.9% from the comparable quarter. Premiums were enhanced by successful new fixed rate products and rapid growth of unit-linked products, which grew 46%. These two products categories, fueled by good investment performance, accounted for 84% of revenues in the individual life and savings line compared with 68% in the first quarter of 2000. Group insurance premiums grew 11.1% in the quarter. We continued to expand our mutual fund product line, with a new structured product capturing almost Euro 50 million during its four week offering period. Other European countries: Premiums increased by 27.3% to Euro 802 million. NORTH AMERICA Life and savings premium income decreased 13.6% to Euro 2,871 million.
United States: Premiums were Euro 2,855 million, down 13.8% from the record first quarter of 2000. Annuity premiums, which represent 60% of total revenues, decreased 18.9%. Despite this decrease, AXA increased market share in both individual variable annuities and variable life based on preliminary industry results. Life premiums decreased 3.5% as a fall in the sporadic corporate life insurance (COLI) market was partially offset by stronger life sales in the wholesale distribution channel. The financial planning roll-out showed continued strength as client assets in AMA rose 13% and the number of funded AMA accounts grew 27% on a sequential basis. The number of financial plans sold in the quarter increased 14% while the number of plans delivered in the same period rose 45% when compared with the fourth quarter of 2000. Other fee revenues (4% of the activity), particularly investment management fees and higher commissions on distribution of third-party products, grew 10%. ASIA PACIFIC Life and savings premiums rose 7.1% to Euro 2,380 million. Australia and New Zealand: Premiums increased 27.9% to Euro 543 million, driven by new business in savings and retirement products, which grew 42.2%, as a result of product improvements as well as growth in distribution channels. Health premiums, 23% of total premiums, rose 20.5% as a governmental incentive measure benefited this business. Other product lines grew 10.1% from higher renewal premiums on a growing in-force portfolio, and accounted for 13% of total premiums in the quarter. Japan: Written premiums were Euro 1,561million, flat with first-quarter premiums in 2000 on a comparable basis. However a significant mix change from low margin group products to high margin individual products continues to progress. Group product premium declined 16% due to non-renewal, while individual premiums grew 8.5%, fuelled by market demand for newly launched variable life and annuity products. Health premiums grew 5.3%. PROPERTY AND CASUALTY Consolidated premium income rose 3.3% to Euro 5,017 million during the quarter.
France: Premiums grew 4.7% to Euro 1,368 million a result of both rate increase and growth in the book of business. Motor, which represents 39% of total premium, rose 3.6%. Personal lines grew 2%, despite stricter underwriting standards. Commercial lines grew 7.7%, primarily due to significantly higher rates, partially offset by a decline in the book of business. Property, which represents 34% of total premium, grew 5.8%, primarily due to rate increases. Germany: Premium grew 2.0% to Euro 1,394 million in a highly competitive market. Motor, comprising 36% of total premium, grew 2% as a result of higher rate. Personal motor premium grew a modest 1%, while commercial lines grew 12%. Property, which represents 25% of total premiums, grew a modest 0.5%. Commercial lines grew 3.6% due to higher rates, while personal lines decreased 2.1% as stiff pricing competition led to lower renewals. Other lines, comprising approximately 40% of premium, increased 3.5% with mixed results by business line. United Kingdom: Written premiums decreased 6.9% to Euro 594 million, the result of significantly tighter underwriting standards in the motor business. Motor: premiums, representing 36% of the total, were down 25% largely due to a deliberate reduction of non-profitable contracts and pricing actions taken during 2000. Non-motor lines, representing 62% of total premiums grew 10% as a result of strength in commercial property (+25%) and an 18% increase in casualty and liability driven by rate increases. Personal line property revenues decreased 6% as the book of business declined. Belgium: Premium income increased 3.2% to Euro 394 million over the year ago period. Personal lines, comprising 59% of written premiums, had a small decline of 0.7%. Motor lines rose 0.5% as a result of rates increases. Property household declined 2.3% as a result of a timing difference in the processing of premium. Commercial lines, which account for 37% of the written premiums, rose 3.6% due to strong rate increases and growth in the book of business. Other Countries: Premiums increased 8.9% to Euro 1,268 million. Spain and Italy, which each represent 25% of the activity in Other Countries, were up 5.9% and 5.7% respectively. Spain benefited from rate increases while Italy benefited from an increase in the book of business. ASSET MANAGEMENT Asset management revenues were down 0.6% to Euro 888 billion. Alliance Capital: Revenues, excluding Euro 239 million from Sanford C. Bernstein which was not acquired until October 2000, were Euro 531 million down 3.7% versus the year ago quarter. This decline was primarily the result of a 12% decline in US equity markets in the first quarter (compared with an increase of 5% a year ago). Assets Under Management (AUM), the principal driver of revenue, declined only 5% in the quarter compared to the 12% market decline, as fixed AUM increased by 11% and net inflows reached Euro 11 billion, remaining positive in all distribution channels. AXA Investment Managers: Revenues rose 20.0% to Euro 112 million as total average AUM increased 7.6%. Revenues were strengthened by an increase in equity fund sales and a sustained migration of insurance company assets from general account investments to separate accounts, both resulting in higher margin fees. Average unit linked AUM increased 12% and average third party AUM increased 17%. INTERNATIONAL INSURANCE International insurance premiums rose 40.5% to Euro 2,020 million Reinsurance Premiums were up 69.3% to Euro 1,311 million, primarily due to higher rates in property catastrophe reinsurance lines, and growth in our book of business for other lines. Insurance Premiums decreased 6.5% to Euro 567 million primarily due to stricter underwriting implemented in France. About AXA AXA Group is a worldwide leader in financial protection and wealth management. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 893 billion in assets under management as of December 31, 2000 and reported revenues of approximately Euro 80 billion for the full year 2000 (Euro 20 billion for the First Quarter of 2001). The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depositary Share is also listed on the NYSE under the ticker symbol AXA. This press release is also available on AXA Group web site: www.axa.com Appendix: First quarter consolidated revenue breakdown in Euro million
(1) Main restatement for scope change are the inclusion of AXA life Japan (formerly AXA Nichidan), Sanford C . Bernstein, and the disposal of Donaldson Lufkin and Jenrette (2) Decrease in actual top line revenue number is driven by the disposal of DLJ which contributed Euro 3 378 million to Q1’00 revenue |
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