Moody’s raises AXA’s insurance financial strength rating to Aa2 with stable outlook

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].