AXA's Revenue Likely Lifted by Weak Euro After Stagnation Over 9-Months

By Noemie Bisserbe and Inti Landauro

PARIS--AXA SA (CS.FR), Europe's second-largest insurer by market value, on Thursday said the weakening euro is likely to boost fourth-quarter revenue after income stagnated during the first nine months of the year.

In the nine months to Sept. 30, revenue inched up to 69.6 billion euros ($87.7 billion) from EUR69.5 billion a year ago, slightly below analyst forecasts of EUR69.76 billion.

The effect of the strong euro during the first nine month of the year almost wiped the growth from AXA's property and casualty divisions, the company said. But AXA's Chief Financial Officer Gerald Harlin told reporters during a conference call that the weakening of the euro so far in October is likely to boost the company's revenue in the fourth-quarter.

AXA, like its peers in Europe, has grappled with the eurozone's uncertain investment market and low interest rates, which have hurt its asset management and savings products. To revive growth, the French insurer has been investing in fast-growing businesses and emerging markets, and pulling out of parts of Europe, plagued by sluggish growth.

Revenue at the life and savings division was down 1% to EUR41.1 billion, while the property and casualty revenue was up 3% to EUR23.2 billion. The group's international insurance business was up 1% to EUR2.6 billion, while asset management revenue fell 8% to EUR2.4 billion.

Excluding the effect of currency swings, AXA's overall sales during the first nine months of the year were up 2%, AXA said.

Life and savings annual premium equivalent, known as APE, was up 3% at EUR4.7 billion from EUR4.6 billion in the same period last year. APE measures new business growth for life insurance by combining the value of payments on new regular premium policies, and 10% of the value of payments made on one-time, single-premium products.

AXA left intact its guidance of an annual growth rate of 5% to 10% in earnings per share over the period between 2010 and 2015 and still aims to cut costs by EUR1.9 billion in 2015 from 2011's level. It said its solvency ratio--a key measure of an insurance company's financial strength--was 265% at the end of September, up from 222% a year ago.

-Write to Inti Landauro at [e-mail]

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