U.S. Insurer AXA Equitable Leaves AXA Name Behind

By Leslie Scism and Nicole Friedman 

AXA Equitable Holdings Inc. is dropping AXA from its name in another sign the company is breaking free of insurance conglomerate AXA SA, its parent since the 1990s.

The rebranding follows the initial public offering of AXA Equitable shares in May 2018 and a secondary offering last year, which reduced ownership by the French powerhouse to a small slice.

The 161-year-old New York company is expected to announce its new name, Equitable Holdings, on Tuesday morning, company executives said.

Mark Pearson, the U.S. company's chief executive, said in an interview that the decision to revert to the company's original name was an easy one.

The company was founded in 1859 as The Equitable Life Assurance Society of the United States.

"It's got such brand goodwill in there, particularly in the baby-boomer generation" that remembers the pre-AXA years when Equitable Cos. was the moniker, he said.

This move highlights the trend of U.S. life-insurance brands separating from larger insurance corporations due to challenging market conditions.

Industrywide in the U.S., individual life-insurance-policy sales have fallen about 45% since the mid-1980s, though sales have flattened out in recent years, according to Limra, an industry-funded research firm.

AXA's acquisition of the U.S. company in 1992 was part of a wave of European purchases of American life insurers, as the European companies sought to earn fees from baby boomers' retirement savings.

Since the 2008 global financial crisis, some of those acquirers are reacting to tougher and sometimes conflicting capital requirements in Europe and the U.S. for many types of life-insurance products.

At the same time that they need to hold more capital, ultralow interest rates are depressing what they can earn by investing premium dollars.

Paris-based AXA is one of the world's biggest sellers of property-casualty insurance to businesses around the globe. After the financial crisis, it began shifting away from interest-rate-sensitive life insurance toward other types of insurance in which profits are more dependent on underwriting, AXA Chief Executive Thomas Buberl said in an October interview.

Taking AXA Equitable public was part of this strategic shift. Some of the proceeds went toward AXA's acquisition of property-casualty insurer XL Group Ltd. in 2018 for more than $15 billion, he said.

Another reason for the shift, Mr. Buberl said, is that life insurance is difficult to sell. "It's much easier to talk to an entrepreneur about his or her risk situation than to individuals through a banking channel about his or her death," he said.

At AXA today, "there is little dependency on traditional life business."

Besides life insurance sold to U.S. households, the to-be-rebranded Equitable is a large seller of retirement-income annuities, including to teachers through 403(b) tax-advantaged savings programs. It has a fleet of about 4,300 financial advisers and also sells through banks, brokerages and other middlemen.

The company also has a 65% ownership stake in the separately publicly traded asset manager AllianceBernstein Holding LP.

Equitable's management has pledged substantial dividends and share buybacks to investors, with any acquisitions unlikely before next year, Mr. Pearson said.

Mr. Pearson said his team is enthusiastic about competing against U.S. rivals as an independent company.

"The phrase I use internally: We here in the U.S., get to build the house we want to live in. Before, we were living in AXA's house," he said.

Write to Leslie Scism at [e-mail] and Nicole Friedman at [e-mail]

(END) Dow Jones Newswires

January 13, 2020 17:14 ET (22:14 GMT)

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