Axa Sa · EURONEXT:CS
Axa Sa — Axa Sa Ord — FY2023 Earnings Presentation
51 slides from Axa Sa's earnings presentation, Feb 22, 2024
Slide 1: Full Year 2023 Earnings presentation
Full Year 2023 Earnings presentation February 22, 2024 GIE_AXA_Confidential
Slide 2: Important legal information and cautionary statements
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS AND THE USE OF NON-GAAP FINANCIAL MEASURES Certain statements contained herein may be forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, t
Slide 3: Full Year 2023 | Continued strong delivery
Full Year 2023 | Continued strong delivery New capital management policy* €7.6bn +8% Group UEPS1 +16% Group UE DPS +6% vs. FY22 IFRS4 vs. FY22 IFRS4 vs. FY22 75% 227% €6.5bn €1.1bn Share buy-back Total Solvency II ratio Cash remittance payout ratio +12pts vs. FY22 in 2023 announced today In addition
Slide 4: Delivered on Driving Progress 2023, even in a challenging context
Delivered on Driving Progress 2023, even in a challenging context Underlying earnings per share1,2 Return on Equity1 In Euro +9% CAGR Driving Progress Driving Progress 14.7% 14.5% 14.9% 3.08 3.31 2023 2023 2.56 2.75 3% - 7% 13% - 15% UEPS CAGR 2021-2023 2020 rebased-2023 FY20 FY21 FY22 FY23 FY21 FY2
Slide 5: Revenue growth driven by P&C, Group earnings in line with target
Revenue growth driven by P&C, Group earnings in line with target In Euro billion GWP & Other Revenues1 Underlying earnings2 vs FY22 IFRS17/9 +3%3 +6% or +6% core business 7.6 +27% 101.8 102.7 Group UE top line growth4 7.3 P&C +14% 5.0 +73% P&C +7% 53.0 P&C UE Life & Health +1% -8% Life +1% 32.0 3.2
Slide 6: P&C | Focused on profitable growth, maintaining pricing discipline
P&C | Focused on profitable growth, maintaining pricing discipline In Euro billion GWP & Other Revenues +7% o/w o/w o/w 53.0 Change 50.6 pricing1 volume2 mix & others ▶ AXA XL Insurance renewal price at +3%, or +6% excluding US Professional, with continued favorable Commercial 33.0 pricing in short-
Slide 7: P&C | Earnings growth from higher underwriting result
P&C | Earnings growth from higher underwriting result, benefitting from skew towards Commercial lines, and higher investment income In Euro million Combined ratio Underlying Earnings +94.6% in FY22 IFRS4 +73% +14% 97.6% vs. FY22 93.2% +484 IFRS4 5.0% -184 -521 5,012 4.8% +2,303 Financial result Prio
Slide 8: P&C | Continued improvement in Commercial lines
P&C | Continued improvement in Commercial lines, pricing actions to drive recovery in Personal lines Commercial lines (62% of P&C GWP1) Personal lines (33% of P&C GWP1) current year loss ratio current year loss ratio +0.4pt +2.5pts 71.5% 73.0% +1.0pt -0.9pt 69.9% 70.8% -1.4pts -1.1pts o/w +0.8pt lar
Slide 9: Life & Health | Continued growth in Protection
Life & Health | Continued growth in Protection, outflows in Traditional G/A in line with strategy In Euro billion Life GWP Health GWP & Other Revenues & Other Revenues Net flows +1% -7% or +7% excl. Total of Euro -4.1 bn 32.2 32.0 non-renewed 17.3 Group contracts1 16.1 Protection +3.7 Protection +4%
Slide 10: Life & Health | Higher new business volumes, resilient NBV margin
Life & Health | Higher new business volumes, resilient NBV margin In Euro billion PVEP NBV NBV margin (post-tax) +8% 45.9 43.3 +3% -0.2pt 2.3 2.3 5.3% 5.0% Protection 30.4 & Health +11% Unit-Linked -5% 6.4 FY22 FY23 FY22 FY23 Capital-light G/A +8% New Business 7.3 €1.5bn €2.4bn -2% €1.5bn €2.2bn CSM
Slide 11: Life & Health | New business driving sustainable growth in CSM
Life & Health | New business driving sustainable growth in CSM In Euro billion Contractual Service Margin rollforward Key sensitivities1 +1.6 -2.9 +0.5 -0.2 +2.2 -0.8 33.8 33.3 CSM stock Baseline 33.8 Normalized CSM growth +3% Interest rates +50bps 0.0 Interest rates -50bps -0.3 Corporate spread +50
Slide 12: Life & Health | Resilient earnings despite higher Health claims frequency
Life & Health | Resilient earnings despite higher Health claims frequency in the UK In Euro million Underlying Earnings -8% +1% 3,563 vs FY22 ▶ Lower CSM release mainly in Life in France, IFRS4 -84 +132 reflecting outflows in traditional G/A Savings 3,232 1,283 -157 -222 Technical & ▶ Lower technica
Slide 13: Asset Management | Robust third-party net flows
Asset Management | Robust third-party net flows, revenues impacted by lower average AUM Assets under management and Gross revenues in Euro billion Underlying earnings in Euro million Assets under management Underlying earnings stable +13 -9% 845 843 400 JVs -11 -4 97 360 ▶ Lower revenues, driven by
Slide 14: Net income of Euro 7.2 billion, driving higher shareholders' equity
Net income of Euro 7.2 billion, driving higher shareholders’ equity In Euro billion Net income Shareholders’ equity +10% vs. FY22 46.1 49.6 IFRS4 +45% 7.2 In Euro million Underlying earnings 7,604 Shareholders’ Equity 55.9 5.1 54.8 Net Realized Capital Gains & Losses +179 (excluding OCI) Change in F
Slide 15: Cash at Holding | Higher cash remittance and robust cash position
Cash at Holding | Higher cash remittance and robust cash position In Euro billion Net Cash Remittance FY22 Cash position 4.5 Net cash remittance from subsidiaries +6.5 6.5 o/w ordinary cash remittance from subsidiaries +6.3 5.5 o/w from inforce management +0.2 Dividend (paid in May 2023) -3.8 Share
Slide 16: Solvency II at 227%, supported by strong capital generation
Solvency II at 227%, supported by strong capital generation In Euro billion Including provision for share buy-back for 2024: €1.6bn Key sensitivities +8.4 -0.3 -1.1 Ratio as of December 31, 2023 227% 58.5 +0.2 57.4 Eligible Own P&C +5.1 -6.1 L&S +4.1 -2.1 Interest rate +50bps +4 pts Funds (EOF) Hold
Slide 17: New capital management policy, already reflected in FY23
New capital management policy, already reflected in FY23 Capital management policy* Retained earnings 75% 60% from dividend 25% payout ratio1 15% from annual share buy-back2 retained in the business to fund organic growth Dividend per share at least equal to the prior year Deliver compounding book v
Slide 18: AXA Investor Relations | Keep in touch
AXA Investor Relations | Keep in touch Meet our management Contact us Investor Relations March 11 Investor Dinner London +33 1 40 75 48 42 anu.venkataraman@axa.com March 12 Morgan Stanley European Financials Conference London Head of Investor Relations remi.dousteyssier@axa.com March London & US Roa
Slide 19: Appendices
Appendices GIE_AXA_Confidential
Slide 20: Table of contents
Table of contents 1. Debt and Invested Assets p.21 2. Additional P&C disclosures p.25 3. Additional IFRS17 disclosures p.30 4. Sustainability p.34 GIE_AXA_Confidential
Slide 21: Gross financial debt and maturity breakdown
Gross financial debt and maturity breakdown as at December 31st, 2023 In Euro billion Gross financial debt1 Contractual maturity breakdown 0.5 Debt 21.7% 20.3% gearing2 9.1 0.8 19.3 18.8 0.9 5.4 0.5 0.8 0.8 5.7 5.4 2024 2025 2026 2027 2028 2029 2030 2031- ≥2040 Undated 2039 11.4 10.6 Economic maturi
Slide 22: General Account Invested Assets
General Account Invested Assets Invested assets (100%) FY23 Total General Account In Euro billion FY23 % invested assets Fixed income 343 76% Duration gap at 0 year o/w Government bonds and related 172 38% o/w Corporate bonds 123 27% 1 o/w Other fixed income 48 11% 2 Euro Real estate 49 11% 454 List
Slide 23: Investment portfolio | Fixed Income reinvestment
Investment portfolio | Fixed Income reinvestment FY23 Fixed Income reinvestment FY23 Fixed Income reinvestment yield 5.9% 3.8% 4.0% Euro 39 billion Core Alternative Total fixed income fixed income fixed income ▶ Euro 39 billion fixed income invested at 4.0% Government bonds & related (45%) – Average
Slide 24: Table of contents
Table of contents 1. Debt and Invested Assets p.21 2. Additional P&C disclosures p.25 3. Additional IFRS17 disclosures p.30 4. Sustainability p.34 GIE_AXA_Confidential
Slide 25: P&C | Focus on Reserves
P&C | Focus on Reserves Claims reserves ratio (Net undiscounted claims reserves/Net earned premiums) 179% 185% 193% 188% 189% 198% 195% FY18 FY19 FY20 FY21 FY22 FY22 FY23 IFRS4 IFRS17 Technical reserves ratio (Net undiscounted technical reserves1/Net earned premiums) 213% 227% 233% 226% 227% 234% 23
Slide 26: P&C | Proactively managing social inflation at AXA XL since 2018
P&C | Proactively managing social inflation at AXA XL since 2018 Reserve strengthened Disciplined underwriting since acquisition at the time of the acquisition ▶ Strong price increases in US Excess Casualty ▶ Strengthening of Terms & Conditions Reinsurance protecting AXA XL Insurance ▶ Average gross
Slide 27: P&C | 2024 Simplified Group Nat Cat Reinsurance Program
P&C | 2024 Simplified Group Nat Cat Reinsurance Program1 In Euro Insurance segment Reinsurance (occurrence protection) segment (illustrative) Higher capacity Alternative 3.9bn 2.1bn 2.1bn 1.2bn 1.2bn Capital & Cat Bonds Stable retention level 550m 450m 400m 600m 600m 400m EU Europe Europe NA NA Per
Slide 28: P&C | AXA Group earnings deviation with different levels of Nat Cat cost
P&C | AXA Group earnings deviation with different levels of Nat Cat cost1 in 2024 In Euro billion (net of reinsurance) Group underlying earnings deviation to average Nat Cat charges in 2024 Average Expected Nat Cat charges net of reinsurance, post-tax net of reinsurance, pre-tax More severe years €+
Slide 29: Table of contents
Table of contents 1. Debt and Invested Assets p.21 2. Additional P&C disclosures p.25 3. Additional IFRS17 disclosures p.30 4. Sustainability p.34 GIE_AXA_Secret
Slide 30: P&C | Margin Analysis
P&C | Margin Analysis Technical Result Financial Result In Euro million (pre-tax) In Euro million (pre-tax) FY23 Change FY23 Change Undiscounted Technical Margin 1,668 +1,654 Investment Income 3,344 +484 Gross Earned Premiums 52,326 +5% FY23 Average Assets €108bn All Year Undiscounted Combined Ratio
Slide 31: P&C | Current Accident Year Discounting and Insurance Finance Expenses
P&C | Current Accident Year Discounting and Insurance Finance Expenses Current Accident Year Discounting Impact Insurance Finance Expenses In Euro billion, pre-tax In Euro billion, pre-tax 1.9 Accident Year Unwind Accident Year 1.2 discount impact 2022 2023 2024e 2017 & prior n.a. -0.0 -0.0 -0.0 201
Slide 32: L&H | Margin Analysis
L&H | Margin Analysis Technical Result Financial Result In Euro million, pre-tax In Euro million, pre-tax FY23 Change Short-term Technical Margin 168 -228 FY23 Change Gross Earned Premiums 14,809 -6% + Investment Income (non-VFA only) 2,480 -110 All Year Combined Ratio 98.9% +1.4pt FY23 Average Asse
Slide 33: Table of contents
Table of contents 1. Debt and Invested Assets p.21 2. Additional P&C disclosures p.25 3. Additional IFRS17 disclosures p.30 4. Sustainability p.34 GIE_AXA_Confidential
Slide 34: AXA for Progress Index: indicators to measure our impact
AXA for Progress Index1: 7 indicators to measure our impact Target 2023 Result -20% As a carbon intensity reduction -48% GLOBAL of AXA’s portfolio by 20252 INVESTOR €26bn in green investments by 2023 €30bn €1.3bn As a in green business revenues €2bn GLOBAL by 2023 INSURER 12m inclusive protection cu
Slide 35: AXA is recognized as sustainable leader
AXA is recognized as sustainable leader Score: 81/100 In DJSI Europe & DJSI World indexes 2023 score: AAA 2023 score: B DJSI accounts for 10% of performance conditions of AXA’s shares for top management Moody’s Analytics Included in the ESG Risk Rating: 2023 score: 68/100 Bloomberg Gender Equality I
Slide 36: Scope
Scope ▪ France: includes insurance activities, banking activities and holdings ▪ Europe: includes Switzerland (insurance activities), Germany (insurance activities and holding), Belgium (insurance activities and holding), Luxemburg (insurance activities and holding), United Kingdom and Ireland (insu
Slide 37: Glossary (1/2)
Glossary (1/2) ▪ 2020 rebased: FY20 underlying earnings rebased includes actual underlying earnings restated for “Covid-19 claims” and natural catastrophes in excess of normalized level. AXA Group normalized level of natural catastrophe charges in 2020 at ca. 3% of Gross Earned Premiums. Natural cat
Slide 38: Glossary (2/2)
Glossary (2/2) ▪ New Business Contractual Service Margin (NB CSM): a component of the carrying amount of the asset or liability for newly issued insurance contracts during the period, representing the unearned profit to be recognized as insurance contract services are provided ▪ New Business Value m
Slide 39: Full Year 2023 Earnings Presentation Supplement
Full Year 2023 Earnings Presentation Supplement February 22, 2024 This supplement is being provided exceptionally in written form to give investors certain contextual information for the attached earnings presentation that Management ordinarily would provide orally. This supplement 39 should be read
Slide 40: FY23 Supplement | Slide 3: Continued strong delivery
FY23 Earnings Presentation – Supplement ▪ Unless otherwise specified, all comparative figures for prior periods in this document are FY22 figures (as applicable) restated under the IFRS17/9 accounting standards that became effective on January 1, 2023 ▪ Change in GWP & Other Revenues, PVEP, NBV, NB
Slide 41: Supplement | New capital management policy of 75% total payout ratio
New capital management policy of 75% total payout ratio already reflected in FY23, reflecting: ▪ 60% dividend payout ratio for FY23 (versus 55% in FY22), representing Euro 1.98 dividend per share, up 16% versus FY22 ▪ 15% payout from annual share buy-back of Euro 1.1 billion. There is an additional
Slide 42: Supplement | Slide 6: P&C pricing discipline
Slide 6: P&C | Focused on profitable growth, maintaining pricing discipline FY23 Commercial lines gross written premiums & other revenues up 9% versus FY22, driven by: ▪ Favorable pricing (+4%) across all geographies, notably at (i) AXA XL Insurance (+3%), across all business lines, except for US Pr
Slide 43: Supplement | Slide 7: P&C earnings growth
Slide 7: P&C | Earnings growth from higher underwriting result, benefitting from skew towards Commercial lines, and higher investment income FY23 P&C combined ratio down 4.2pts versus FY22 under IFRS17, reflecting: ▪ Favorable evolution of undiscounted current year loss ratio excluding Nat Cat (at 6
Slide 44: Supplement | Slide 8: P&C Commercial and Personal lines
Slide 8: P&C | Continued improvement in Commercial lines, pricing actions to drive recovery in Personal lines FY23 Commercial lines current year loss ratio down 1.5pts versus FY22, at 69.9%, reflecting: ▪ A more favorable loss ratio excluding Nat Cat (-0.9pt) driven by a favorable pricing environmen
Slide 45: Supplement | Slide 9: Life & Health growth in Protection
Slide 9: Life & Health | Continued growth in Protection, outflows in Traditional G/A in line with strategy FY23 Life gross written premiums & other revenues up 1% versus FY22, driven by: ▪ Higher sales of Capital-light G/A Savings products (+12%), notably from the continued success of Eurocroissance
Slide 46: Supplement | Slide 10: Life & Health new business
Slide 10: Life & Health | Higher new business volumes, resilient NBV margin FY23 PVEP up 8% versus FY22, driven by: ▪ Protection and Health (+11%), mainly driven by (i) higher sales in Protection, notably in Hong Kong from higher mainland Chinese visitors’ business, and in (ii) Health, mainly driven
Slide 47: Supplement | Slide 12: Life & Health earnings
Slide 12: Life & Health | Resilient earnings despite higher Health claims frequency in the UK FY23 Life & Health earnings down 8% versus FY22, mainly driven by: ▪ Lower technical result (Euro -157 million), reflecting (i) unfavorable prior year reserve developments on a run-off portfolio in Protecti
Slide 48: Supplement | Asset management earnings and net income
FY23 Asset management earnings down 9% versus FY22, driven by: ▪ Lower revenues (-2%), mainly driven by lower management fees, reflecting a lower average asset base ▪ Higher expense (+4%), reflecting a change in accounting treatment of variable compensation, partly offset by cost containment measure
Slide 49: Supplement | Slide 15: Cash at Holding
Slide 15: Cash at Holding | Higher cash remittance and robust cash position FY23 cash at Holding down Euro 0.5 billion versus FY22, reflecting: ▪ Net cash remittance from subsidiaries of Euro +6.5 billion, up from Euro 5.5 billion in FY22 o Ordinary remittances across the Group of Euro +6.3 billion,
Slide 50: Supplement | Slide 16: Solvency II at 227%
Slide 16: Solvency II at 227%, supported by strong capital generation FY23 Solvency II ratio up 12pts versus FY22, driven by: ▪ Normalized capital generation (+29pts), at the high-end range of the 25-30pts Group’s guidance in 2023 ▪ Dividend and share buy-backs (-22pts), reflecting a 75% total payou
Slide 51: Supplement | Slide 17: New capital management policy
Slide 17: New capital management policy, already reflected in FY23 As part of the new strategic plan communicated on February 22, 2024, AXA announced a new capital management policy with a total targeted payout ratio of 75%, comprising 60% in dividend payout and 15% in annual share buy-backs. You ca