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Spread the loveQUESTION: Mr. Armstrong, you warned that Iran would face a crisis in February 2026. You also said Iran would enter a period of extreme conflict with the turning point in 2024. Now we have ships moving to Iran. Socrates has been showing a sharp rise in volatility beginning in February into September. I understand you are a trader and not a theoretical academic. Did you have any idea in creating Socrates that you not just disproved Random Walk Theory, but you created a system that does more tha ...

Core Insights - The insurance selection process for SMEs is increasingly influenced by factors such as price, service quality, transparency, and flexibility, as competitive pressures make pricing advantages harder to maintain [1] Pricing and Transparency - According to GlobalData's 2025 UK SME Insurance Survey, policy price is the most critical factor for SMEs, with 39.5% ranking it in their top five selection criteria, followed closely by pricing transparency at 37.3% and ease of understanding policy information at 35.8% [2] Customization and Tailored Insurance - The survey indicates that 31.2% of SMEs prioritize the ability to tailor insurance coverage to their specific needs, surpassing brand recognition (26.2%) and prior relationships with insurers (20.8%), suggesting a shift towards flexible, needs-based product design [3] - This trend presents opportunities for smaller insurers and Managing General Agents (MGAs) to disrupt the market by offering competitive pricing, clear policy terms, and highly tailored coverage, allowing them to compete effectively despite lower brand recognition [3] Market Pressures and Demand Shifts - AXA UK's 2025 research highlights that rising national insurance contributions, high business rates, and increasing operating costs are reshaping SMEs' risk priorities and insurance demands, leading to a preference for coverage that reflects their specific business models and sector risks [6] Engagement Opportunities - Both AXA's research and GlobalData's findings emphasize the potential for insurers to enhance SME engagement through transparent pricing, simplified communications, and flexible product designs, indicating that those who adapt their offerings will be better positioned for growth and retention in the SME segment [7]

Core Viewpoint - Investors are comparing Ageas SA (AGESY) and Axa SA (AXAHY) to determine which stock offers better value for investment at the current time [1] Valuation Metrics - Ageas SA has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Axa SA has a Zacks Rank of 4 (Sell) [3] - The forward P/E ratio for AGESY is 8.30, compared to AXAHY's 10.13, suggesting AGESY may be undervalued [5] - AGESY has a PEG ratio of 0.72, while AXAHY has a PEG ratio of 1.48, indicating AGESY's expected earnings growth is more favorable [5] - The P/B ratio for AGESY is 1.31, whereas AXAHY's P/B ratio is 1.95, further supporting AGESY's valuation attractiveness [6] Investment Conclusion - Given the stronger estimate revision activity and more attractive valuation metrics, AGESY is viewed as the superior investment option compared to AXAHY [7]

Core Viewpoint - AXA SA is exercising caution in financing artificial intelligence (AI) developments due to emerging risks in private markets, despite a belief in the medium-term trend of AI [1][2] Group 1: AI Financing Strategy - AXA is avoiding overly specialized data centers dedicated to single technologies or players, focusing instead on data centers with inference and general-purpose capabilities [2] - The company acknowledges the significant investments in AI infrastructure, which have reached astronomical volumes recently [1] Group 2: Private Credit Market Concerns - The collapse of US auto parts supplier First Brands has raised concerns about risks in the $1.7 trillion private credit market, affecting financial firms including insurers and banks [3][4] - AXA has approximately €65 billion deployed in private and structured credit, and is reviewing its portfolio line by line in response to recent market events [5] Group 3: Investment Guidelines and Portfolio Management - AXA's private and structured credit allocation constitutes around 14% of its total deployment, with over half in senior tranches of collateralized loan obligations or mortgages in Europe [5] - The firm maintains a focus on investment-grade assets, with about 84% of its private credit portfolio rated as such [5] - AXA prefers single managed accounts or structured funds with strict investment guidelines, avoiding investments without covenants or in covenant-lite arrangements [6] Group 4: Economic Considerations - AXA is steering clear of technological bets and exposure to subprime consumers, noting a two-tiered economy in the US where affluent consumers are increasingly driving market trends [7]

Core Insights - AXA and Industrial and Commercial Bank of China (ICBC) signed a strategic cooperation memorandum to enhance collaboration in various financial sectors [3] - The partnership signifies an upgrade in the relationship between the two financial institutions and reflects the ongoing deepening of Sino-French economic and financial cooperation [3] - The collaboration aims to leverage opportunities in green transformation and digital economy, providing improved comprehensive financial services to clients [3] Summary by Categories Strategic Cooperation - AXA and ICBC agreed to deepen cooperation in insurance, cross-border financial services, green finance, asset management, and risk protection [3] - The memorandum emphasizes resource sharing and market opportunity expansion between the two entities [3] Economic and Financial Cooperation - The partnership is a vivid representation of the continuous deepening of economic and financial ties between China and France [3] - The Sino-French Entrepreneurs Committee, established in January 2018, aims to promote economic exchanges and diversified development between the two countries [3] Future Opportunities - Both parties will actively seize opportunities in green transformation and digital economy development [3] - The collaboration is expected to inject new momentum into sustainable economic development in China, France, and globally [3]

Group 1 - AXA XL has appointed Sylvain Eyraud as the new country manager for Italy, effective from January 1, 2026, pending regulatory approval [1] - Eyraud has over 15 years of experience in the insurance sector, having held various roles at AXA, including APAC & Europe Strategy head [1][2] - The appointment is expected to enhance AXA XL's business growth and innovation in Italy, with a focus on collaboration across the AXA ecosystem [3] Group 2 - AXA recently acquired a 51% stake in Italy-based Prima, a managing general agent with €1.2 billion ($1.39 billion) in premiums for 2024, for €500 million [3] - This acquisition is anticipated to nearly double AXA's size in the motor business segment and strengthen its market presence in Italy [4] - Donnacha Smyth was appointed as the global chief underwriting officer for casualty in September 2025, bringing over three decades of experience in the insurance industry [4]

Core Viewpoint - AXA SA reported solid Q3 results, but the share price has declined by over 10% since the last update on first-half figures [1] Group 1: Financial Performance - AXA SA delivered a strong set of Q3 results, indicating robust operational performance [1] Group 2: Market Reaction - The share price of AXA SA has retreated by more than 10% since the previous update, reflecting market sentiment despite the positive quarterly results [1]

Core Insights - The focus is on constructing investment portfolios that generate additional income through dividends, emphasizing companies with competitive advantages and strong financials [1] - The strategy combines high Dividend Yield and Dividend Growth to reduce dependence on stock market fluctuations [1] - A well-diversified portfolio across various sectors is recommended to minimize volatility and mitigate risk [1] Investment Strategy - The investment portfolio typically includes a blend of ETFs and individual companies, prioritizing broad diversification and risk reduction [1] - Companies with a low Beta Factor are suggested to further lower the overall risk level of the investment portfolio [1] - The selection process for high dividend yield and growth companies is meticulously curated, focusing on total return, which includes both capital gains and dividends [1] Portfolio Management - The approach aims to maximize returns while considering a full spectrum of potential income sources [1] - The goal is to create a well-crafted investment portfolio that generates extra income through dividends while reducing risk through diversification [1]

Core Viewpoint - Moody's Ratings has upgraded AXA SA's insurance financial strength rating to Aa2 from Aa3, reflecting a stable outlook due to the company's reinforced business profile, improved profitability, and robust capital position [1][2]. Group Performance - AXA's debt ratings were raised by one notch across various categories, including junior subordinated debt, senior unsecured debt, and preferred stock, indicating an overall improvement in creditworthiness [2]. - The commercial paper rating was affirmed at P-1, and ratings for AXA's European operating subsidiaries and XL Bermuda Ltd were also upgraded to Aa2 with a stable outlook [3]. Financial Strength - AXA's Solvency II ratio stands at 220% as of Q2 2025, consistent with levels since 2021, showcasing strong capital adequacy [4]. - The company has shifted away from life underwriting and reduced market risk exposure, enhancing capital resilience while maintaining strong internal capital generation despite significant shareholder distributions [4]. Profitability and Earnings Stability - AXA's profitability has significantly improved, with returns on capital reaching approximately 9% in 2023 and 2024, compared to an average of 6% from 2019 to 2022 [5]. - Earnings stability has increased, with the property and casualty segment now contributing around two-thirds of underlying profits, while life and health segments continue to provide steady contributions [6]. Risk Exposure - AXA's exposure to French sovereign risk is moderate, with domestic government bonds accounting for about 5% of invested assets and French operations representing around 24% of group earnings, supporting resilience to potential market volatility [7]. Outlook - The outlook for AXA and its core operating entities is stable, with expectations to preserve business model strength, sustain profitability, and maintain solid capital adequacy [8].