Axa Sa · EURONEXT:CS
Axa Sa — Axa Sa Ord — Q1 2023 Earnings Presentation
30 slides from Axa Sa's earnings presentation, May 15, 2023
Slide 1: 1Q 2023 Activity Indicators Presentation
1Q 2023 Activity Indicators Presentation May 15, 2023 GIE_AXA_Confidential
Slide 2: Important legal information and cautionary statements
MPORTANT 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, tre
Slide 3: 1Q 2023 key highlights
1Q 2023 key highlights ▶ Topline at €32bn up +1% ▪ Strong growth in technical lines including +7% in P&C Commercial lines, +4% in P&C Personal lines, and +2% in Protection ▪ Ongoing right-sizing of non-prioritized lines, lower fee business reflecting challenging market conditions ▶ Continued discipl
Slide 4: Continued growth momentum, mix consistent with strategy
Continued growth momentum, mix consistent with strategy In Euro billion +1%1 Strong growth in our technical businesses 31.2 31.8 ▶ Excellent growth in P&C in both Commercial lines (+7%) and Personal lines (+4%), reflecting price increases ▶ Continued organic growth in Health (+7%) excluding impact o
Slide 5: Continued pricing discipline in 1Q23, remaining ahead of claims inflation
Continued pricing discipline in 1Q23, remaining ahead of claims inflation Price Effect1 FY22 1Q23 1 AXA XL AXA XL Insurance +7.4% +5.7% Prices reaccelerating across most lines of business, partly offset by increased competition in NA Professional lines AXA XL Reinsurance1 +7.5% +12.8% Commercial lin
Slide 6: Quality new business mix, PVEP and NBV impacted by higher rates
Quality new business mix, PVEP and NBV impacted by higher rates in Protection and Health In Euro billion PVEP -17% NBV NBV margin 14.2 11.7 +0.4pt -11% 0.7 5.6% Protection 0.7 5.2% & Health -14% 7.7 Unit-Linked -9% 1.5 1Q22 1Q23 1Q22 1Q23 Capital-light G/A -12% -31% 1.5 Traditional G/A 1.0 New Busin
Slide 7: Solvency II ratio at 217% supported by strong capital generation
Solvency II ratio at 217% supported by strong capital generation Solvency II ratio Solvency II ratio rollforward 215% 217% FY22 Solvency II ratio 215% Operating return +7pts Accrued dividend -4pts Market impact 0pt Management actions +5pts Regulatory and model changes -6pts 1Q23 Solvency II ratio 21
Slide 8: Update on IFRS 17/9
Update on IFRS 17/9 May 15, 2023 GIE_AXA_Confidential
Slide 9: AXA reaffirms Group's key IFRS 17/9 messages
AXA reaffirms Group’s key IFRS 17/9 messages Group underlying earnings in Euro billion above 7.5 7.3 Group underlying earnings’ power unaffected targeting above €7.5bn for 2023, including ca €-0.1bn of FX headwind 6.15 Cash and capital unaffected by accounting changes Solvency II at 215%1 and €5.5bn
Slide 10: Confident outlook for 2023
Confident outlook for 2023 UEPS CAGR set to exceed +7% maintained under IFRS 17/9 (2020 rebased-2023) In Euro billion 2022 2023 targets IFRS 4 IFRS 17/91 Key IFRS 17/9 drivers2 At least Property & Casualty 4.4 4.7 ▪ Improved technical result ▪ Lower financial result with higher unwind ▪ Predictable
Slide 11: FY22 P&C underlying earnings | Transition to IFRS 17/9
FY22 P&C underlying earnings | Transition to IFRS 17/9 FY22 Combined ratio Normalised IFRS 17/9 combined IFRS 17/9 financial result will published ratio lower than under IFRS 4 reflect unwind of discount in Euro billion / pre-tax 97.6% 94.6% 93.7% 2.9 0.1 94.6% 1.7% -0.5 2.5 4.0% 4.0% 4.9% 5.0% Illu
Slide 12: 2023 P&C underlying earnings target
2023 P&C underlying earnings target | Expecting strong growth from higher technical results In Euro billion at least 4.7 4.4 Improved technical result ▪ improving pricing environment ▪ Nat Cat load of ca. 4pts ▪ PYD release within range of 0.5pt to 2pts ▪ lower large losses from the non-repeat of th
Slide 13: FY22 Life underlying earnings | Transition to IFRS17/9
FY22 Life underlying earnings | Transition to IFRS17/9 Underlying Earnings building blocks in Euro billion IFRS 4 UE: €2.6bn Long-term technical result Technical results -0.5 2.9 0.9 ▪ long-term result mostly driven by predictable CSM 2.5 release, limited experience variance -0.1 0.2 Non-VFA financi
Slide 14: FY22 Life CSM | CSM release expected to be sustainable
FY22 Life CSM | CSM release expected to be sustainable In Euro billion Recurring items New Business CSM reported on risk-neutral basis 0.6 -2.5 25.5 Underlying return on inforce 1.9 0.2 24.6 reflects unwind of discount and expected excess investment 1.3 return over risk-neutral assumptions -0.6 CSM
Slide 15: FY22 Health underlying earnings | Transition to IFRS 17/9
FY22 Health underlying earnings | Transition to IFRS 17/9 Underlying Earnings building blocks in Euro billion IFRS 4 UE: €0.6bn Technical results Long-term technical result ▪ mostly driven by a predictable CSM release 0.2 -0.2 ▪ impacted by Covid claims in Japan and two large 0.6 international Group
Slide 16: FY22 Health CSM | CSM impacted by sharp increase in interest rates
FY22 Health CSM | CSM impacted by sharp increase in interest rates In Euro billion Recurring items 0.2 New Business CSM 8.8 0.4 -0.6 mostly driven by new business in Japan -1.0 0.1 -0.3 7.8 CSM release ▪ reported release ratio of 7% within the expected release ratio of 6% to 8% p.a. ▪ future CSM rel
Slide 17: 2023 Life & Health underlying earnings target
2023 Life & Health underlying earnings target | Earnings expected to remain resilient Underlying earnings in Euro billion ~3.3 CSM 3.2 predictable CSM release Technical result ▪ non-repeat of elevated Health claims in Japan & France ▪ non-repeat of a positive model change in Japan in Life Lower non-
Slide 18: Net Income | FY22 reflects change in accounting treatment of listed equities
Net Income | FY22 reflects change in accounting treatment of listed equities In Euro billion 6.7 -1.2 Underlying Earnings notably from lower PYD and changes in discounting 5.1 -0.7 0.3 Realized capital gains ▪ equity gains go directly in retained earning within shareholders’ equity under IFRS 17/9 ▪
Slide 19: Shareholders' equity | less volatile under IFRS 17/9
Shareholders’ equity | less volatile under IFRS 17/9 In Euro billion IFRS 17/9 IFRS 4 Shareholders' equity 51.9 71.1 45.4 46.3 Change in OCI related to net invested assets and liabilities -5.4 -27.1 Realized gains on equities 0.6 - Net income for the period 5.1 6.7 Dividend (paid in 2022) -3.5 -3.5
Slide 20: Concluding remarks
Concluding remarks Confident in our 2023 underlying earnings target Shareholders’ Equity (excl. OCI) broadly stable vs IFRS 4 No change to cash remittance and Solvency II ratio ‘Driving Progress 2023’ key financial targets1 reaffirmed including UEPS CAGR set to exceed +7%2 and cumulative cash remitt
Slide 21: Appendix
Appendix GIE_AXA_Confidential
Slide 22: P&C | FY22 underlying earnings under IFRS 17/9 not representative
P&C | FY22 underlying earnings under IFRS 17/9 not representative due to non-recognition of release of reserves in excess of best estimate In Euro billion FY22 IFRS 4 reserves in excess FY22 P&C underlying earnings of undiscounted SII BEL IFRS 4 to IFRS 17/9 roll-forward gross of tax net of tax 3.4
Slide 23: Indicative 2022 IFRS 17/9 sensitivities
Indicative 2022 IFRS 17/9 sensitivities In Euro billion Life & Total Group Health CSM stock Net OCI Baseline 33.3 -8.5 Interest rates +50bps 0.1 -0.4 Interest rates -50bps -0.3 0.4 Corporate spread +50bps -0.9 -0.8 Corporate spread -50bps 0.8 0.8 Listed equities +25% 0.6 1.2 Listed equities -25% -0.
Slide 24: FY22 Underlying Earnings by geography
FY22 Underlying Earnings by geography In Euro billion IFRS 4 IFRS 17/9 Delta Mainly from the removal of release of excess reserves, not France 1.8 1.3 -0.6 recognized under IFRS 17/9, as well as the impact of non-recognition of the change in discount rates in P&C annuities, partly offset by higher L
Slide 25: FY22 Shareholders' equity | Reconciliation to FY22 Solvency II EOF
FY22 Shareholders’ equity | Reconciliation to FY22 Solvency II EOF In Euro billion Mainly from Real Estate Foreseeable dividends to be paid in 2023: €3.9bn 8.0 Provision for share buy-back announced in Feb 2023: €1.1bn 75.6 26.3 11.4 58.5 -22.1 -2.7 -6.0 -0.7 -5.0 o /w Goodwill €-17.8bn Addition of
Slide 26: Q&A session
Q&A session GIE_AXA_Confidential
Slide 27: Scope
Scope ▪ France: includes insurance activities, banking activities and holding in France. ▪ Europe: includes Switzerland (insurance activities), Germany (insurance activities and holding), Belgium (insurance activities and holding), Luxembourg (insurance activities and holding), United Kingdom and Ir
Slide 28: Glossary (1/2)
Glossary (1/2) ▪ Building Block Approach (BBA): also referred to as ‘General Measurement Model’, compulsory measurement model for long-term non-participating business. ▪ Capital-light products: encompass all products with no guarantees, with guarantees at maturity only or with guarantees equal to or
Slide 29: Glossary (2/2)
Glossary (2/2) ▪ Present value of expected premiums (PVEP): PVEP represents the new business volume, equal to the present value at time of issue of the total premiums expected to be received over the policy term. The present value is discounted at the reference interest rate and PVEP is Group share.
Slide 30: Thank you
Thank you GIE_AXA_Confidential