AXA - Strong Activity Levels in the First Nine Months of 2005

Acceleration Of Growth in Life & Savings and Asset Management During the Third Quarter of 2005 PARIS, Nov. 8 /PRNewswire-FirstCall/ -- -- Life & Savings new business (APE(1)) increased by 8% to Euro 3,770 million driven by most of our major operations. New business growth accelerated in the third quarter of 2005 (approximately +10%), notably in Japan, the United Kingdom, Belgium, Hong-Kong, the United States and Australia. Unit-linked new business increased by 17%. -- Life & Savings New Business Value (NBV) was up 18% to Euro 652 million, driven by most of our major operations, notably France, the US, Belgium, Southern Europe, Australia and Japan. As a result, NBV margin increased to 17.3% (or 17.9% on a comparable basis) from 16.3% in the first nine months of 2004. -- Property & Casualty revenues increased by 3% to Euro 14,677 million, as Personal lines were up 3%, benefiting from a resilient pricing environment and moderate portfolio growth, and Commercial lines were up 1%. -- International Insurance revenues increased by 10% to Euro 3,183 million. The 13% increase at AXA RE was due to the non-recurrence of some 2004 negative premium adjustments, increased reinstatement premiums linked to 2005 major events and selected development in lines with favorable pricing conditions. AXA Corporate Solutions Assurance was up 5%, driven by Marine and Aviation. -- Asset Management revenues increased by 10% to Euro 2,404 million driven by higher average Assets Under Management (AUM) (+16% compared to 9M04). Both AXA IM and Alliance Capital contributed to very strong net inflows of Euro 42 billion, excluding the impact of the sale of Alliance Capital Cash Management Services. Over the third quarter of 2005 alone, revenue growth accelerated to approximately +13%. 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. "Once again, the global reach of our organization, associated with strong diversification, is enabling the Group to seize growth where it exists" said Henri de Castries, Chief Executive Officer of AXA. "Life & Savings and Asset Management growth is comfortably within our targeted range, fully benefiting from regional diversification, be it in Asia, the US or some countries in Europe, as well as from a wide product offering with the unique combination of two leading asset managers, Alliance Capital and AXA Investment Managers." Nine months ended (Euro million, except when otherwise noted) September September Change Change on a 30, 2005 30, 2004 comparable basis Life & Savings, group share APE 3 770 3 411 +10.5% +10.5% NBC 776 678 +14.6% +14.9% NBV 652 556 +17.2% +18.1% Property & Casualty revenues 14 677 13 987 +4.9% +2.6% International Insurance revenues 3 183 2 930 +8.6% +9.6% Asset Management Revenues 2 404 2 275 +5.7% +10.1% Net inflows (Euro billion): - excluding AC cash management(2) 42 21 - including AC cash management 19 20 LIFE & SAVINGS: Life & Savings new business increased by 8% to Euro 3,770 million driven by all of our major operations with the only exception of Germany. Unit-linked new business increased by 17% to represent 45% of total Life & Savings APE, compared to 43% in the first nine months of 2004. The US continued to benefit from the MONY acquisition, with new business up 15% on a reported basis. On a comparable basis(3), the US growth in Life and Variable Annuity businesses was partly offset by our cautious stance on Fixed Annuity. France new business growth reflected the continued focus on unit-linked products. New business growth was particularly strong during the third quarter (approximately +10%), notably in Japan, the United Kingdom, Belgium, Hong- Kong, the United States and Australia. New Business Value (NBV) was up 18% to Euro 652 million, driven by most of our major operations, notably France, the US, Belgium, Southern Europe, Australia and Japan as a result of higher volume and product mix improvement. As a result, NBV margin increased to 17.3% (or 17.9% on a comparable basis) from 16.3% in the first nine months of 2004. Annual Premium Equivalent, September September Change Change on a Group share (Euro million) 30, 2005 30, 2004 comparable Nine months ended basis Life & Savings 3 770 3 411 +10.5% +7.8% France 809 762 +6.3% +6.3% United States 1 245 1 080 +15.3% +4.3% United Kingdom 599 514 +16.5% +18.7% Japan 432 387 +11.7% +15.5% Germany 181 233 -22.5% -22.5% Benelux 200 163 +22.8% +22.9% Southern Europe 99 82 +20.0% +20.0% Australia/New Zealand 155 145 +6.8% +4.5% Hong-Kong 50 45 +11.8% +15.1% France new business increased by 6% with continued focus on profitability, as demonstrated by the increased share of unit-linked products. Investment & Savings APE was up 11%, reflecting strong growth in individual unit-linked premiums (up 39% to represent 27% of total Investment & Savings new business), driven by the focus on these products in proprietary channels with an acceleration in September following the launch, in the salaried employee network, of "Odyssiel", a new unit-linked product. Group protection business was impacted by the non-recurrence of some large premiums in 2004. The United States new business increased by 4% primarily driven by Life APE (up 11%) and Variable Annuity APE (up 8% compared to +5% in 1H05), partly offset by a 60% decline in Fixed Annuity APE, as, in the current interest rate environment, this product does not correspond to Group profitability targets. Excluding fixed annuities, new business was up 8% with a strong acceleration in the third quarter (+11%). Japan new business increased by 16%. Individual business APE grew by 11%, driven by Term Life products and riders (following the launch of new products in October 2004 and March 2005), and Group Life APE was up 313%, primarily due to the New Mutual Aid product, a Group Term Life product featuring new cancer and disability riders. Japan new business growth accelerated strongly in 3Q05 to +28% as a result of strong momentum of new products and continued improved productivity in the AXA Advisors channel. In the United Kingdom, new business was up 19% driven by strong sales of unit-linked investment bonds (+38%) and Group Pension products (+31%). Sales within the IFA channel were up 26%. In September, AXA announced it had gained a position on the Bankhall multi-tie panel, following a similar agreement with Sesame in July. Germany new business was down 23%(4), following the strong Life new business boom in 2004 in connection with the reduction of tax privileges, partly offset by the growth in Investment & Savings unit-linked products (+17%). The Health market continued to be negatively impacted by higher social contribution limits introduced at the beginning of 2004 and the continued uncertainty over the potential changes in the Health regulatory environment. Benelux new business growth accelerated to +23% driven by Belgium up 30%, mainly due to the continuing strong growth momentum of structured unit-linked products, such as the open-architecture product Millesimo, and Crest 30 and 40 (non unit-linked products with no guaranteed rate). Southern Europe new business increased by 20%, mainly driven by traditional savings' new business in the agent network in Italy and strong activity in individual Life products (including the launch of new products), partly offset by lower unit-linked business as 3Q04 was particularly strong, benefiting from the launch of some significant bancassurance agreements. Australia/New-Zealand new business was up 5%, with third quarter APE up 8%, driven by continuing strong sales into "Generations" and "Summit" dedicated platforms and increased sales of global equity growth and value funds. Hong-Kong new business increased by 15% reflecting further improvements in productivity in both agency and adviser channels and significant increase in single premiums driven by strong inflows into investment and retirement products, in particular in the new multi-manager investment platform, as well as higher sales of "Mandatory Provident Fund", a pension product, through broker and direct channels. Life & Savings New Business Value (NBV) was up 18% to Euro 652 million due to increased volume and favorable shift in product mix. As a result, NBV margin increased to 17.3% (or 17.9% on a comparable basis) compared do 16.3% in the first nine months of 2004. PROPERTY & CASUALTY: Property & Casualty revenues increased by 3% to Euro 14,677 million, as Personal lines were up 3%, benefiting from a resilient pricing environment and moderate portfolio growth, and Commercial lines were up 1%. IFRS Revenues September September Change Change on a Nine months ended 30, 2005 30, 2004 comparable (Euro million) basis Property & Casualty 14 677 13 987 +4.9% +2.6% - France 3 998 3 860 +3.6% +3.6% - Germany 2 326 2 346 -0.9% -1.2% - United Kingdom & Ireland (a) 3 381 3 504 -3.5% +0.8% - Belgium 1 124 1 108 +1.4% +1.4% - Southern Europe 2 198 2 106 +4.4% +4.4% - Other countries (b) 1 650 1 063 +55.2% +8.0% (a) The right to renew our UK Personal Direct business was sold to RAC in October 2004. In the first nine months of 2004, revenues from this activity amounted to Euro 95 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 2004, other countries 9M04 P&C revenues would have been Euro 365 million higher. In addition, the Netherlands disability activity has been transferred from Life & Savings to Property & Casualty. Other countries 9M04 P&C revenues would have been Euro 70 million higher if disability had been included. Personal lines (58% of P&C premiums) showed overall growth of 3%. Motor revenues grew 3%, mainly driven by Southern Europe and France, up 5% and 2%, respectively, benefiting from positive net inflows of +119,400 and +40,000 policies, respectively. Non-motor revenues increased by 4%, mainly driven by household in France, the UK which also benefited from the growth in the creditor business, Belgium and Southern Europe, as a result of portfolio evolution and increased tariffs. Commercial lines (35% of P&C premiums) recorded a 1% growth. Motor revenues were flat, mainly as positive evolution in France (+4%), Belgium (+3%) and Southern Europe (+3%) was offset by the decrease of UK & Ireland revenues (-7%), in a context of intense competition in Ireland. Non-motor revenues were up 1% mainly driven by France (+5%) as a result of tariff increases in most business lines, while maintaining a strict underwriting policy. Other Lines (7% of P&C premiums) revenues increased by 1% as the planned reduction of assumed business in Germany was more than offset by UK Health growth. INTERNATIONAL INSURANCE: International Insurance revenues increased by 10% to Euro 3,183 million. The 13% increase at AXA RE was due to the non-recurrence of some 2004 negative premium adjustments, increased reinstatement premiums linked to 2005 major events and selected development in lines with favorable pricing conditions. AXA Corporate Solutions Assurance up 5%, driven by Marine and Aviation. IFRS Revenues September September Change Change on a Nine months ended 30, 2005 30, 2004 comparable (Euro million) basis International Insurance 3 183 2 930 +8.6% +9.6% - AXA RE 1 314 1 087 +20.9% +13.1% - AXA Corporate Solutions Assurance 1 310 1 245 +5.2% +5.4% - Others(a) 559 598 - 6.6% +12.1% (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 the first nine months of 2004, this represented Euro 37 million of AXA Cessions revenues. Reinsurance: Revenues increased by 13%, due to the non-recurrence of some 2004 negative premium adjustments, the increase in reinstatement premiums linked to major events in 2005 and higher premiums in selected non proportional General Liability business, taking advantage of favorable pricing conditions, as well as in Credit business. Insurance: AXA Corporate Solutions Assurance revenues increased by 5% reflecting a selective growth in the marine and aviation lines of business. Development remained cautious on commercial property and liability lines. ASSET MANAGEMENT: Asset Management revenues increased by 10% to Euro 2,404 million driven by higher average Assets Under Management (AUM) (+16% compared to 9M04). Both AXA IM and Alliance Capital contributed to very strong net inflows of Euro 42 billion, excluding the impact of the sale of Alliance Capital Cash Management Services. Over the discrete third quarter of 2005, revenue growth accelerated to approximately +13% and net inflows amounted to Euro 26 billion excluding Alliance Cash Management Services. IFRS revenues(5) September September Change Change on a Nine months ended 30, 2005 30, 2004 comparable (Euro million) basis Asset Management 2 404 2 275 +5.7% +10.1% - Alliance Capital 1 737 1 714 +1.3% +6.8% - AXA Investment Managers(a) 668 561 +19.0% +20.1% (a) Excluding management and front-end fees collected by AXA Investment Managers on behalf of external distributors, gross revenues increased 24% on a comparable basis. Alliance Capital: Revenues were up 7% as higher investment advisory fees, driven by 11% higher average AUM, and higher performance fees more than offset lower distribution revenues and lower shareholder servicing fees in the retail channel as well as lower transaction charges following Alliance's restructuring of its Private Client fee structure which effectively eliminates transaction charges while raising base fees. AUM increased by Euro 66 billion from year-end 2004 to Euro 461 billion at the end of September 2005 as a positive exchange rate impact (Euro 53 billion), a favorable market impact (Euro 23 billion) and strong net positive long-term inflows (Euro 13 billion) more than offset the Euro 23 billion decrease in AUM related to the sale of the Cash Management Services to Federated Investors. In the discrete third quarter, all channels experienced positive net inflows: Institutional (+Euro 6 billion), Private Clients (+Euro 2 billion) and Retail (+Euro 2 billion). AXA Investment Managers: Revenues increased by 20%, while gross revenues, excluding management and front-end fees collected on behalf of external distributors, increased by 24%, driven by higher average AUM (+21%), mostly on segments with higher average fee levels, and by higher performance fees, especially on AXA Rosenberg's portfolios. AUM increased by Euro 67 billion from year-end 2004 to Euro 412 billion at the end of September 2005 primarily driven by (i) Euro 29 billion of net inflows mainly from institutional and retail third party clients (Euro +22 billion) especially on AXA Rosenberg's products as well as real estate, fixed income and structured finance products, (ii) a Euro 30 billion favorable market impact, and (iii) a Euro 6 billion positive foreign exchange rate impact. (1) Annual Premium Equivalent (APE) represents 100% of new business regular premiums +10% of new business single premiums. APE is group share. (2) Alliance Capital's Cash Management Services have been sold to Federated Investors. (3) As MONY was acquired in July 8, 2004, the constant scope in the US includes the contribution of MONY only for the discrete third quarters of both 2004 and 2005. (4) Or down 43% excluding year-end 2004-related backlog. (5) Net of inter-company transactions. 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 53 billion for the first nine months 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 Emmanuel Touzeau: +33.1.40.75.49.05 Kevin Molloy: +1.212.314.2893 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 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. APPENDIX 1 LIFE & SAVINGS - Annual Premium Equivalent (APE) and New Business Value (NBV) for 9 main countries/regions and modeled business First Nine Months of 2005 - Group Share Euro million APE APE Change Change on 9M 05 9M 04 comparable basis France 809 762 + 6% + 6% United States 1 245 1 080 + 15% + 4% United Kingdom 599 514 + 17% + 19% Japan 432 387 + 12% + 16% Germany (incl. Health) 181 233 - 23% - 23% Benelux 200 163 + 23% + 23% Southern Europe 99 82 + 20% + 20% Australia / New Zealand 155 145 + 7% + 5% Hong Kong 50 45 + 12% + 15% TOTAL APE (9 main countries/regions) 3 770 3 411 + 11% + 8% New Business Value (NBV) 652 556 + 17% + 18% NBV to APE margin 17.3% 16.3% +1.0 pt +1.6 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 Nine Months of 2005 - Group Share % UL in APE 9M 05 APE (excl. mutual funds) UL change Euro million UL Non-UL Mutual 9M05 9M04 on comparable Funds basis France 161 649 20% 16% + 32% United States 660 277 308 70% 73% + 9% United Kingdom 516 83 86% 82% + 25% Japan 12 420 3% 2% + 37% Germany 55 125 31% 27% - 13% Benelux 56 144 28% 23% + 52% Southern Europe 16 82 1 16% 23% - 14% Australia/New-Zealand 17 21 116 44% 43% - 11% Hong-Kong 20 30 40% 28% + 60% TOTAL 1 513 1 831 425 45% 43% + 17% APPENDIX 3 PROPERTY & CASUALTY - Split by business lines - First Nine Months of 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 33% + 2% 28% + 3% 9% + 4% Germany 31% - 1% 29% - 0% 7% + 0% Belgium 36% + 0% 27% + 3% 6% + 3% United Kingdom (a) 12% - 7% 23% + 7% 7% - 7% Southern Europe 57% + 5% 19% + 5% 6% + 3% Canada 39% + 6% 16% + 8% 8% - 3% The Netherlands 11% - 5% 35% + 9% 25% - 5% Others 59% + 17% 26% + 5% 2% NS TOTAL 33% + 3% 25% +4% 7% + 0% (a) Including Ireland Commercial Other Non-Motor Lines % Gross Change % Gross Change Revenues on comp. Revenues on comp. Basis Basis France 30% + 5% Germany 26% - 1% 7% - 9% Belgium 31% + 2% United Kingdom (a) 30% - 4% 27% + 7% Southern Europe 17% + 3% Canada 36% + 5% The Netherlands 30% - 1% Others 15% + 8% TOTAL 27% + 1% 7% + 1% (a) Including Ireland APPENDIX 4 AXA GROUP Revenues - 9M 04 French GAAP/IFRS RECONCILIATION - Comparison 9M 04 vs. 9M 05 Euro million 9M 04 9M 05 IFRS revenue change French Reconciliation IFRS IFRS Reported Comp. GAAP basis TOTAL 54 400 - 3 697 50 703 53 066 4.7% 3.8% Life & Savings 34 616 - 3 381 31 235 32 468 3.9% 3.1% France 8 815 - 239 8 576 9 409 9.7% 9.7% United States 9 502 9 502 10 107 6.4% 0.2% United Kingdom 4 617 - 2 825 1 792 1 739 -2.9% -1.1% Japan 4 154 4 154 3 488 -16.0% -13.2% Germany 2 500 2 500 2 562 2.5% 2.5% Belgium 1 490 - 12 1 479 1 912 29.3% 29.3% Southern Europe 918 - 23 895 1 008 12.6% 12.6% Other countries (1)(2) 2 620 - 282 2 338 2 243 -4.1% 3.9% of which Australia /New- Zealand 1 162 - 268 893 912 2.1% -0.1% of which Hong-Kong 569 - 13 556 575 3.5% 6.6% Property & Casualty 13 987 13 987 14 677 4.9% 2.6% France 3 860 3 860 3 998 3.6% 3.6% Germany 2 346 2 346 2 326 -0.9% -1.2% United Kingdom + Ireland (3) 3 504 3 504 3 381 -3.5% 0.8% Belgium 1 108 1 108 1 124 1.4% 1.4% Southern Europe 2 106 2 106 2 198 4.4% 4.4% Other countries (1)(2) 1 063 1 063 1 650 55.2% 8.0% International Insurance 2 938 - 8 2 930 3 183 8.6% 9.6% AXA RE 1 087 1 087 1 314 20.9% 13.1% AXA Corporate Solutions Assurance 1 245 1 245 1 310 5.2% 5.4% Others 606 - 8 598 559 -6.6% +12.1% Asset Management 2 260 15 2 275 2 404 5.7% 10.1% Alliance Capital 1 699 15 1 714 1 737 1.3% 6.8% AXA Investment Managers 561 561 668 19.0% 20.1% Other Financial Services 600 - 323 277 333 20.5% 23.1% (1) In the Netherlands, following the sale of the Health portfolio as of December 1, 2004 (IFRS revenues of Euro 164 million in 9M04), the disability activity was transferred from Life & Savings to Property & Casualty (IFRS revenues of Euro 70 million in 9M04). (2) As of January 2005, Turkey (Life + P&C), HK (P&C) and Singapore (P&C) are consolidated. If they had been consolidated in the first nine months of 2004, Life & Savings IFRS revenues would have been Euro 49 million higher and P&C IFRS revenues would have been Euro 365 million higher. (3) The right to renew our UK Personal Direct business was sold to RAC in October 2004. In the first nine months of 2004, revenues from this activity amounted to Euro 95 million. DATASOURCE: AXA Group CONTACT: 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, Emmanuel Touzeau, +33-1-40-75-49-05, Kevin Molloy, +1-212-314-2893, 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 Web site: http://www.axa.com/