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"Insurance is not banking" Gerald Harlin, Axa |
INSURANCE GROUP Axa managed to navigate a tough 2008, reporting underlying earnings of €4 billion, down 17% on 2007, but up from 2006, and a record combined ratio of 95.5%. Net income fell over the year, from €5.6 billion to just €923 million. However, in today’s environment and despite an IFRS negative mark to market, it is an achievement to remain in positive territory. Axa’s property and casualty business underpins the firm’s earnings, up 29% on a reported basis from 2007, while the life and savings business was down 44%.
Diversification has been key. The business model at Axa is split between property and casualty insurance, life insurance and asset management. In times of turmoil, the P&C business runs well. The competitors who failed were too focused on one business line or country, or had diversified into areas such as investment banking.
