Paris-based AXA posted better-than-expected full-year results on Thursday, but the globally-active insurance company barely mentioned its international life products business, which once was the UK industry’s market leader.
The company, Europe’s second-largest insurer by market capitalisation, didn’t say much about its international life products business, beyond noting that its “life & savings” new business volume, in annual premium equivalent, was up 5% on a comparable basis and 14% on a reported basis from 2014, after benefiting from “a positive Forex effect”. The increase, it said, was mainly driven by unit-linked products in key markets, and strong sales of protection and health products, again in certain markets.
AXA’s UK life & savings business saw sales totalling £512m (US$713.5m) last year, down around 1% from 2014’s £516m, the AXA data show; this compared with “life & savings” sales out of its Hong Kong office last year of HK$21.757bn (£2bn, US$2.8bn), up 8% from 2014’s HK$20bn.
AXA said its international insurance business posted earnings of €193m in 2015, down 8% from 2014’s €208m.
Income up 3% on sales up 1%
In a 22-page summary of its results, AXA said its total net income grew by 3%, to €5.62bn last year, compared to 2014’s results, which was slightly ahead of analysts’ estimates.
Total sales were €98.5bn, up 1% from 2014, and also fractionally ahead of expectations.
Its AXA Wealth operation reported a 27% growth in new business, to £667m, as funds under management in its pensions and investments businesses grew by 13%, to £31.8bn, helped, it said, by strong new business “as a result of the recent pension freedom reforms” in the UK market.
Architas growth cited
A bright spot in its business in 2015, according to AXA, was its UK multi-manager business, Architas, where AUM grew by 46% to£19.8bn in 2015. In a statement, the company said this had been helped by its “successful European expansion”, which saw the AXA UK Architas operation merge with the businesses of AXA’s European multi-manager operations, which had been announced in September of last year. It wasn’t clear how much if any of the growth was attributable to the combining of the European AUM with those of Architas.
In today’s announcement, AXA made no reference to a report, published yesterday by MoneyMarketing, of a rumoured sale of AXA Wealth’s protection business to UK mutual life company Royal London.
In its report, Money Marketing said it understood that Royal London was “finalising a bid for Axa Wealth’s protection business”, and that Royal London was “believed to be in [a] second round [of] talks” with AXA, “along with several other potential buyers, in a deal insiders estimate at £40m”.
This news follows other reports, mainly last year, that parts of AXA’s UK business, including its Isle of Man-based life products operation, were quietly up for sale.
AXA Wealth target met
In a statement accompanying the results this morning, AXA Wealth chief executive Mike Kellard, pictured, said his operation had met a five-year target it that had been set for it.
“This year, advisers will be looking at how to help those clients impacted by a further reduction in the lifetime allowance; we’ll see a long-overdue review of the financial advice market in the UK, to attempt to close the advice gap; and there’s likely to be changes to the way pensions are taxed, to encourage people to save,” Kellard added.
“We still have lots to do though. Our focus will be on understanding and delivering on the areas that matter most to our customers; increasing our investment choices and adding model portfolio functionality, enhancing our retirement offering and delivering consistently excellent customer service.”