AXA: First Quarter 2005 Activity Indicators Continuing Towards
Profitable Growth - Life & Savings new business APE and NBV up
8% PARIS, May 12 /PRNewswire-FirstCall/ -- -- Life & Savings
new business APE(1) increased by 8% to Euro 1,263 million, mainly
driven by strong sales in Belgium, Southern Europe, France and
Hong-Kong. Unit-linked APE increased by 15%. -- In line with APE,
Life & Savings New Business Value(2) increased by 8% to Euro
206 million, resulting in an NBV margin of 16.3% (or 17.1% on a
comparable basis, slightly up compared to first quarter 2004). --
Property & Casualty revenues increased by 2% to Euro 5,903
million. Both personal and commercial lines were up 2%, benefiting
from a resilient pricing environment and moderate portfolio growth.
Other lines increased 7%, driven by UK Health. -- International
Insurance revenues increased by 6% to Euro 1,772 million, with AXA
RE up 8% due to its European expansion strategy and AXA Corporate
Solutions Assurance up 6%, driven by Marine, Aviation and
Construction. -- Asset Management revenues increased by 5% to Euro
753 million, driven by higher average assets under management
(+15%) as a result of favorable market conditions since March 2004
and strong net inflows (Euro 11 billion in 1Q05 excluding Alliance
Capital Cash Management Services). Numbers herein have not been
audited or 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. APE, NBC and NBV
are non-GAAP measures. Management uses these measures as key
indicators of performance in assessing AXA's Life & Savings
business and believes that the presentation of these measures
provides useful and important information to shareholders and
investors. IFRS revenues are available in Appendix 4 of this
release. "We are satisfied to see our Life & Savings new
business growth well in line with our long-term objectives." said
AXA Chief Executive Officer Henri de Castries. "Profitable volume
expansion associated with product mix improvements are the basis
for our high new business value and margin. "Our P&C revenues
development demonstrates our ability to attract new clients, while
maintaining a strict underwriting discipline in a more competitive
pricing environment. "After a very good performance in 2004, Asset
Management activities have maintained their dynamic momentum,
recording strong positive long-term net inflows of Euro 11 billion
during this first quarter." Three months ended (Euro million,
except when March 31, March 31, Change Change on a otherwise noted)
2005 2004 comparable basis Life & Savings, group share APE 1
263 1 129 + 11.8 % +7.7 % NBC 250 232 +7.9 % +8.1 % NBV 206 192
+7.3 % +8.0 % Property & Casualty revenues 5 903 5 631 +4.8 %
+2.2 % International Insurance revenues 1 772 1 689 +4.9 % +5.6 %
Asset Management Revenues 753 743 +1.4 % +4.8 % Net inflows (Euro
billion): - including AC cash management 9 1 - excluding AC cash
management 11 -1 LIFE & SAVINGS: Life & Savings new
business APE increased by 8% to Euro 1,263 million, mainly driven
by strong sales in Belgium, Southern Europe, France and Hong- Kong.
In the US, our 21% APE growth on a reported basis benefited from
the MONY acquisition, but was dampened by a weak Variable Annuity
market environment. Our Japanese and UK operations were still in
the process of building up their third party distribution capacity,
while Germany benefited from the backlog of year-end 2004 life
business related to clients taking advantage of the more favorable
regulation in force in 2004. New Business Value was up 8% to Euro
206 million mainly as a result of higher volume in Belgium,
Southern Europe, France and Hong-Kong, as well as product mix
improvement especially in France, Japan and Australia/New-Zealand.
Unit-linked APE increased by 15% to represent 44% of total Life
& Savings APE, compared to 42% in the first quarter of 2004.
Annual Premium Equivalent, March 31, March 31, Change on a Group
share (Euro million) 2005 2004 Change comparable Three months ended
basis Life & Savings 1 263 1 129 +11.8 % +7.7 % France 307 280
+9.7 % +9.7 % United States 406 337 +20.5 % +3.2 % United Kingdom
167 162 +3.2 % +5.2 % Japan 119 123 -3.1 % +2.5 % Germany 96 90
+6.9 % +6.9 % Benelux 84 62 +35.3 % +35.3 % Southern Europe 28 22
+27.9 % +27.9 % Australia/New Zealand 42 41 +2.7 % +6.0 % Hong-Kong
15 14 +4.5 % +9.8 % France APE increased by 10%, driven by
Investment & Savings APE up 16%, as individual unit-linked
premiums grew strongly following successful marketing campaigns,
partly offset by the non-recurrence of a large group single premium
in the first quarter of 2004. Individual APE grew 18% driven by
individual unit-linked products APE up 38% to represent 27% of
individual APE. In the United States, excluding the contribution of
MONY in 1Q05, APE increased by 3%, primarily driven by Life
premiums. On the annuity front, the 1% growth in variable annuity
premiums was offset by declines in fixed annuities, down 30%.
According to preliminary market data(3), AXA has maintained its #3
sales position in the variable annuity market with an approximate
8% market share in the first quarter of 2005, up from first quarter
2004. In the United Kingdom, APE was up 5% primarily due to higher
volumes within the IFA channel, up 19%, partly offset by lower
Direct Marketing volumes. APE benefited from strong sales of
unit-linked bonds (+15%) and group pension products (+8%). In
addition, an important new distribution agreement was reached with
Barclays in March 2005. Japan APE increased by 2% as individual
business APE remained stable and Group Life APE was up 113%,
notably driven by New Mutual Aid, a Group Term Life product
launched in October 2004 and featuring new cancer and disability
riders. Sales are not yet benefiting from the new bancassurance
distribution agreements, as bank sales representatives are
currently building up their expertise in the new products
offerings. Germany APE was up 7%, but this evolution was distorted
by a large backlog related to new business written towards the end
of 2004 before a change in regulation effective in 2005. Excluding
this backlog, APE decreased 47% as the salesforce was focused on
treating this backlog and new product training, and as activity in
the Health market remained subdued in light of continuing
uncertainty on future regulation. Importantly, Pensionskasse, a key
focus area, experienced a 4% APE growth. Benelux APE grew 35%
driven by Belgium up 50%, due notably to strong activity on
structured unit-linked products, such as the recently launched
open-architecture product, Millesimo, and also to strong sales of
Crest 30 (non unit-linked product). APE increased 28% in Southern
Europe, mainly driven by strong increases in Italy and Spain single
premiums as Italy experienced high new business in individual
traditional savings products and Spain benefited from bank
distribution agreements for unit-linked products.
Australia/New-Zealand APE was up 6%, as the 9% decrease in
traditional products, due to the planned reduction in retirement
income, was more than offset by a 13% increase in mutual funds
sales through mezzanine trusts, ipac and the newly launched
Generations administration platform. Hong-Kong APE increased by
10%, primarily due to a new unit-linked product launched in late
2004 and higher contributions to the pension product "Mandatory
Provident Fund." Life & Savings New Business Value was up 8% to
Euro 206 million due to increased volume and shift in product mix.
Note that NBV for both 1Q04 and 1Q05 were computed using
profitability factors by products from year-end 2004, keeping all
economic, productivity and actuarial assumptions the same. PROPERTY
& CASUALTY: Property & Casualty revenues increased by 2% to
Euro 5,903 million. Both personal and commercial lines were up 2%,
benefiting from a resilient pricing environment and moderate
portfolio growth. Other lines increased 7%, driven by UK Health.
IFRS Revenues March 31, March 31, Change on a Three months ended
2005 2004 Change comparable (Euro million) basis Property &
Casualty 5 903 5 631 +4.8 % +2.2 % - France 1 667 1 610 +3.5 % +3.5
% - Germany 1 329 1 329 +0.0 % +0.0 % - United Kingdom, including
Ireland (a) 1 067 1 136 -6.0 % -1.8 % - Belgium 439 430 +2.0 % +1.9
% - Southern Europe 799 750 +6.5 % +5.3 % - Other countries (b) 602
376 +60.2 % +7.5 % (a) The right to renew our UK Personal Direct
business was sold to RAC in October 2004. In 1Q04, revenues from
this activity amounted to Euro 31 million. (b) As of January 2005,
Turkey, Hong-Kong and Singapore are now fully consolidated instead
of being accounted for under the equity method. If full
consolidation had been applied in 1Q04, other countries P&C
revenues would have been Euro 134 million higher. In addition, the
Netherlands disability activity has been transferred from Life
& Savings to Property & Casualty. Other countries P&C
revenues would have been Euro 50 million higher in 1Q04 if
disability had been included. Personal lines (56% of the P&C
premiums) showed overall growth of 2%. Motor revenues grew 2% in
the first quarter of 2005. France and Southern Europe motor
revenues were up 3% and 5%, respectively, driven by positive net
inflows of +14,700 and +41,100, respectively, partly mitigated by
some pressure on tariffs. Non-motor revenues rose 3% mainly driven
by Household in France, UK, Belgium and Southern Europe owing to
satisfying portfolio evolution and increased tariffs. Commercial
lines (38% of the P&C premiums) recorded a 2% growth. Motor
revenues decreased by 2%, mainly driven by the UK & Ireland
(-7%), in a context of intense competition in Ireland, and Southern
Europe (-8%) due to the non-renewal of a large fleet contract, in
line with strict underwriting policy. Non-motor revenues were up 3%
driven by France (+7%) and Southern Europe (+10%) followed by
Germany (+2%) and Belgium (+2%) mainly as a result of tariff
increases across the board, while maintaining a strict underwriting
policy. Other Lines (6% of the P&C premiums) increased by 7%
driven by UK Health (+8%). INTERNATIONAL INSURANCE: International
Insurance revenues increased by 6% to Euro 1,772 million, with AXA
RE up 8% due to its European expansion strategy and the non
recurrence of significant recaptures that took place in 2004, and
AXA Corporate Solutions Assurance up 6%, driven by Marine, Aviation
and Construction. IFRS Revenues March 31, March 31, Change on a
Three months ended 2005 2004 Change comparable (Euro million) basis
International Insurance 1 772 1 689 +4.9 % +5.6 % - AXA RE 762 737
+3.4 % +7.5 % - AXA Corporate Solutions Assurance 798 757 +5.4 %
+6.1 % - Others(a) 212 196 +9.0 % -2.8 % (a) Following the full
consolidation of Turkey, Hong-Kong and Singapore, AXA Cessions
revenues derived from business with these entities are now
eliminated as inter-company transaction. In 1Q04, this represented
Euro 23 million of AXA Cessions revenues. In addition, in line with
the restructuring of AXA RE and AXA Corporate Solutions Assurance,
all businesses related to US entities in run-off, formerly owned by
AXA RE, have been transferred to a new US holding company reported
in "Other transnational activities". Reinsurance: Revenue increased
by 8% due to expansion in Europe and the non recurrence of last
year's significant recaptures on the credit enhancement portfolio,
which lowered 1Q04 revenues. Insurance: AXA Corporate Solutions
Assurance revenues increased by 6% due to selective growth with
underwriting discipline, offset by some business cancellation. This
increase in revenues also reflected a proactive approach on well
oriented business lines such as Marine, Aviation and Construction.
ASSET MANAGEMENT: Asset Management revenues increased by 5% to Euro
753 million driven by higher average assets under management (AUM)
(+15% compared to 1Q04) as a result of favorable market conditions
since March 2004 and strong net inflows. In 1Q05, Asset Management
net inflows, excluding Alliance Capital Cash Management Services,
amounted to Euro 11 billion. IFRS revenues(4) March 31, March 31,
Change on a Three months ended 2005 2004 Change comparable (Euro
million) basis Asset Management 753 743 +1.4 % +4.8 % - Alliance
Capital 545 569 -4.1 % -0.5 % - AXA Investment Managers(a) 208 174
+19.5 % +22.8 % (a) Excluding management and front-end fees
collected by AXA Investment Managers on behalf of external
distributors, gross revenues increased 19% on a comparable basis.
Alliance Capital: Revenues remained stable compared to the first
quarter of 2004 as higher average investment advisory fees, driven
by higher average AUM (+11%), were offset by lower institutional
research service fees and lower distribution revenues. AUM
increased by Euro 16 billion from year-end 2004 to Euro 412 billion
at the end of March 2005 as net positive long-term inflows (Euro 4
billion) and a positive exchange rate impact (Euro 20 billion) more
than offset a negative market impact (Euro -7 billion) and cash
management outflows (Euro -2 billion), largely due to the initial
transfer of AUM in the context of the sale of Cash Management
Services to Federated Investors(5). AXA Investment Managers:
Revenues increased by 23%, while gross revenues, excluding
management and front-end fees collected on behalf of external
distributors, increased by 19%, in line with higher average AUM
(+19%). AUM increased by Euro 13 billion from year-end 2004 to Euro
359 billion at the end of March 2005 mostly driven by Euro 6
billion of net inflows, mainly from third party clients, a Euro 5
billion favorable market impact and a Euro 3 billion positive
foreign exchange rate impact. About AXA: AXA Group is a worldwide
leader in financial protection. AXA's operations are diverse
geographically, with major operations in Western Europe, North
America and the Asia/Pacific area. AXA reported total IFRS revenues
of Euro 20 billion for the first quarter of 2005. The AXA ordinary
share is listed and trades under the symbol AXA on the Paris Stock
Exchange. The AXA American Depository Share is also listed on the
NYSE under the ticker symbol AXA. AXA Investor Relations: Matthieu
Andre: +33.1.40.75.46.85 Caroline Portel: +33.1.40.75.49.84 Sophie
Bourlanges: +33.1.40.75.56.07 Marie-Flore Bachelier:
+33.1.40.75.49.45 Kevin Molloy: +1.212.314.28.93 AXA Media
Relations: Christophe Dufraux: +33.1.40.75.46.74 Clara Rodrigo:
+33.1.40.75.47.22 Rebecca Le Rouzic: +33.1.40.75.97.35 Mary Taylor:
+1.212.314.58.45 IMPORTANT LEGAL INFORMATION AND CAUTIONARY
STATEMENTS CONCERNING FORWARD- LOOKING STATEMENTS Certain
statements contained herein are forward-looking statements
including, but not limited to, statements that are predications of
or indicate future events, trends, plans or objectives. Undue
reliance should not be placed on such statements because, by their
nature, they are subject to known and unknown risks and
uncertainties and can be affected by other factors that could cause
actual results and AXA's plans and objectives to differ materially
from those expressed or implied in the forward looking statements
(or from past results). These risks and uncertainties include,
without limitation, the risk of future catastrophic events
including possible future terrorist related incidents, economic and
market developments, regulatory actions and developments,
litigations and other proceedings. Please refer to AXA's Annual
Report on Form 20-F for the year ended December 31, 2003 and AXA's
Document de Reference for the year ended December 31, 2004, for a
description of certain important factors, risks and uncertainties
that may affect AXA's business. AXA undertakes no obligation to
publicly update or revise any of these forward- looking statements,
whether to reflect new information, future events or circumstances
or otherwise. Footnotes: (1) Annual Premium Equivalent (APE)
represents 100% of new business regular premiums plus 10% of new
business single premiums. APE is Group share. (2) New Business
Value (NBV) is New Business Contribution (NBC) after cost of
capital. NBV is Group share. NBV for both 1Q04 and 1Q05 were
computed using profitability factors by products from year-end
2004, keeping all economic, productivity and actuarial assumptions
the same. (3) Source: VARDS. (4) Net of inter-company transactions.
(5) Alliance Capital announced the sale of its cash management
business on October 28, 2004 to Federated Investors. Under the
agreement, up to $25 billion in AUM from Alliance's 22 third-party
distributed money market funds are being transitioned into
Federated money market funds. APPENDIX 1 LIFE & SAVINGS -
Annual Premium Equivalent (APE) and New Business Value (NBV) for 9
main countries/regions and modeled business First Quarter 2005 -
Group Share APE APE Change Change on Euro million 1Q 2005 1Q 2004
comparable basis France 307 280 + 10 % + 10 % United States 406 337
+ 21 % + 3 % United Kingdom 167 162 + 3 % + 5 % Japan 119 123 - 3 %
+ 2 % Germany (incl. Health) 96 90 + 7 % + 7 % Benelux 84 62 + 35 %
+ 35 % Southern Europe 28 22 + 28 % + 28 % Australia / New Zealand
42 41 + 3 % + 6 % Hong Kong 15 14 + 5 % + 10 % TOTAL APE (9 main
countries/regions) 1 263 1 129 + 12 % + 8 % New Business Value
(NBV) 206 192 + 7 % + 8 % NBV to APE margin 16.3 % 17.1 % - 0.7 pt
+ 0.0 pt APPENDIX 2 LIFE & SAVINGS - Breakdown of APE between
unit-linked, non unit-linked and mutual funds 9 main
countries/regions and modeled business First Quarter 2005 - Group
Share % UL in APE 1Q05 APE (excl. mutual UL change on funds)
comparable Euro million UL Non-UL Mutual 1Q05(a) 1Q04 basis Funds
France 66 241 21 % 18 % + 28 % United States 211 89 106 70 % 78 % +
3 % United Kingdom 141 26 85 % 80 % + 12 % Japan 3 116 2 % 3 % - 27
% Germany 34 62 35 % 22 % + 72 % Benelux 27 57 32 % 23 % + 88 %
Southern Europe 5 23 17 % 12 % + 70 % Australia/ New-Zealand 5 6 31
44 % 48 % - 18 % Hong-Kong 6 8 43 % 23 % + 103 % TOTAL 497 629 137
44 % 42 % + 15 % (a) Excluding MONY and using 1Q04 exchange rates,
unit-linked premiums represented 78% of US APE and 45% of total APE
in 1Q05. APPENDIX 3 PROPERTY & CASUALTY - Split by business
lines - First Quarter 2005 Personal Personal Commercial Motor
Non-Motor Motor % Gross Change % Gross Change % Gross Change
Revenues on comp. Revenues on comp. Revenues on comp. basis Basis
Basis France 28 % + 3 % 26 % + 1 % 10 % + 2 % Germany 36 % - 0 % 24
% - 1 % 8 % - 0 % Belgium 32 % + 0 % 27 % + 3 % 8 % + 5 % United
Kingdom (a) 12 % - 15 % 23 % + 5 % 8 % - 7 % Southern Europe 53 % +
5 % 20 % + 5 % 7 % - 8 % Canada 36 % + 6 % 15 % + 5 % 8 % - 5 % The
Netherlands 8 % - 9 % 43 % + 11 % 20 % - 11 % Others 53 % + 11 % 28
% + 5 % 2 % NS TOTAL 32 % + 2 % 24 % +3 % 8 % - 2 % Commercial
Other Non-Motor Lines % Gross Change % Gross Change Revenues on
comp. Revenues on comp. basis Basis France 36 % + 7 % Germany 27 %
+ 2 % 5 % - 4 % Belgium 34 % + 2 % 0 % + 8 % United Kingdom (a) 33
% - 4 % 24 % + 8 % Southern Europe 20 % + 10 % 1 % Canada 41 % + 13
% The Netherlands 29 % - 5 % Others 18 % + 13 % 0 % TOTAL 30 % + 3
% 6 % + 7 % (a) Including Ireland APPENDIX 4 AXA GROUP Revenues -
1Q04 French GAAP/IFRS RECONCILIATION - Comparison 1Q04 vs. 1Q05
IFRS 1Q04 revenue change French 1Q 05 Comp. Euro million GAAP
Reconciliation IFRS IFRS Reported basis TOTAL 20 048 -1 249 18 798
19 623 4,4 % 3,5 % Life & Savings 11 777 -1 134 10 642 11 087
4,2 % 3,5 % France 3 232 -127 3 105 3 435 10,6 % 10,7 % United
States 2 981 2 981 3 202 7,4 % -2,5 % United Kingdom 1 506 -918 588
568 -3,5 % -1,6 % Japan 1 414 1 414 1 124 -20,6 % -16,0 % Germany
857 857 875 2,1 % 2,1 % Belgium 597 -5 592 842 42,2 % 42,0 %
Southern Europe 255 -4 251 297 18,1 % 18,1 % Other countries (1)
(2) 934 -80 854 745 -12,7 % 4,6 % of which Australia/ New-Zealand
345 -75 270 261 -3,5 % -0,4 % of which Hong-Kong 183 -5 178 173
-2,3 % 2,7 % Property & Casualty 5 631 5 631 5 903 4,8 % 2,2 %
France 1 610 1 610 1 667 3,5 % 3,5 % Germany 1 329 1 329 1 329 0,0
% 0,0 % United Kingdom + Ireland 1 136 1 136 1 067 -6,0 % -1,8 %
Belgium 430 430 439 2,0 % 1,9 % Southern Europe 750 750 799 6,5 %
5,3 % Other countries (1) (2) 376 376 602 60,2 % 7,5 %
International Insurance 1 690 -1 1 689 1 772 4,9 % 5,6 % AXA RE 737
737 762 3,4 % 7,5 % AXA Corporate Solutions Assurance 757 757 798
5,4 % 6,1 % Others 196 -1 195 212 9,0 % -2,8 % Asset Management 743
743 753 1,4 % 4,8 % Alliance Capital 569 569 545 -4,1 % -0,5 % AXA
Investment Managers 174 174 208 19,5 % 22,8 % Other Financial
Services 207 -114 94 107 14,7 % 30,1 % (1) In the Netherlands,
following the sale of the Health portfolio as of December 1, 2004
(IFRS revenues of Euro 100 million in 1Q04), the disability
activity was transferred from Life & Savings to Property &
Casualty (IFRS revenues of Euro 50 million in 1Q04). (2) As of
January 2005, Turkey (Life + P&C), HK (P&C) and Singapore
(P&C) are consolidated. If they had been consolidated in 1Q04,
Life & Savings IFRS revenues would have been Euro 25 million
higher and P&C IFRS revenues would have been Euro 134 million
higher. DATASOURCE: AXA Group CONTACT: Investors, Matthieu Andre,
+33-1-40-75-46-85, Caroline Portel, +33-1-40-75-49-84, Sophie
Bourlanges, +33-1-40-75-56-07, Marie-Flore Bachelier,
+33-1-40-75-49-45, or Kevin Molloy, +1-212-314-28-93; or Media,
Christophe Dufraux, +33-1-40-75-46-74, Clara Rodrigo,
+33-1-40-75-47-22, Rebecca Le Rouzic, +33-1-40-75-97-35, or Mary
Taylor, +1-212-314-58-45, all of AXA Web site: http://www.axa.com/
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