UPDATE: AXA Focuses On Emerging Markets, Protection & Health
16 Novembre 2010 - 11:41AM
Dow Jones News
French insurer AXA SA (CS.FR) Tuesday said it plans to pump more
investment into its emerging markets operations and specific
businesses, such as protection and health, as it adapts its
business model to promote earnings growth beyond the financial
crisis.
The company said ahead of its investor day Tuesday that it also
wants to place greater emphasis on free cash-flow generation.
"This, together with an increased focus on improving the business
efficiency of our operations, should allow us to gain flexibility
and contribute to fund our investments for our future growth,"
Chief Executive Henri de Castries said in a statement.
The Paris-based insurer said it expects to present details of
its Ambition AXA strategic plans in the first half of 2011.
Within its life and savings business, AXA expects to increase
the share of new business premiums from its protection and health
activities by five points by 2015. It also aims to increase the
unit-linked portion of its Continental Europe investment and
savings business new premiums by 20 points over the same
period.
AXA sold the bulk of its life operations in the U.K. in June to
consolidation vehicle Resolution Ltd. for GBP2.75 billion, but
retained high-margin, low-capital intensive businesses such as
healthcare insurance and wealth management.
The insurer is targeting a combined ratio, which measures the
percentage of premiums an insurer has to pay out in claims and
expenses, at 100% in 2011 for its non-life business. A combined
ratio below 100% indicates profitable underwriting.
It also expects average targeted price increases for its
non-life products of around 3% next year.
Kepler analyst Pierre Flabbee, who has a buy recommendation on
the stock, said AXA's plan is ambitious, noting that the
cost-cutting plans are aggressive and better than expected.
AXA has repeatedly said it is keen to expand in emerging markets
in Asia in order to grow its business.
On Monday, the French insurer teamed up with Australian wealth
manager AMP Ltd (AMP.AU) to launch a fresh $13.1 billion bid for
AXA Asia Pacific Holdings Ltd. (AXA.AU) in a move that would allow
AXA to exit the Australian market and focus on its plan to grow in
Asia.
AXA will pay around EUR1.8 billion in cash under the terms of
the deal, which is expected to increase earnings-per-share in
2011.
AXA Asia Pacific said Tuesday that five of its six independent
directors have decided to recommend the bid from AXA and AMP Ltd.
in the absence of a superior offer and subject to an independent
assessment. But one of the directors is seeking further information
before deciding whether to back the proposal, the company said.
In a move to further its ambitions in the Chinese life assurance
market, AXA last month formed an alliance with Industrial &
Commercial Bank of China Ltd (1398.HK). The Chinese lender paid
around CNY1.2 billion ($179.10 million) for a 60% stake in
AXA-Minmetals Assurance Co., an insurance joint venture between AXA
and China Minmetals Corp.
At 0930 GMT, AXA shares were down 1.3%, or EUR0.17 lower at
EUR13.37, underperforming the CAC-40 index.
-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65;
elena.berton@dowjones.com
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