Financial Data and Key Metrics - Total revenues increased by 7% in the first 9 months of 2024, driven by strong organic growth across all business lines [3] - P&C revenues grew by 7%, with Commercial and Personal lines both contributing equally [5] - Life & Health premiums increased by 7%, with capital-light G/A savings up 12% and Unit-Linked products up 14% [10] - Solvency II ratio stood at 221% at the end of September, down 6 points from the first half due to unfavorable market effects [13] Business Line Performance - P&C Commercial lines grew by 7%, driven by favorable pricing and higher volumes, particularly at AXA XL [5] - P&C Personal lines revenues increased by 6%, with motor up 5% and non-motor up 8% [8] - Life & Health new business PVEP and NBV increased by 16% and 6%, respectively, with NBV margin slightly down at 4.6 points [12] - Reinsurance revenues grew by 10%, supported by favorable pricing in Property and Casualty and higher volumes in Specialty and Property [8] Market Performance - Pricing trends varied by region, with North America property up 8%, international property up 5%, and U.S. Casualty up 9% [7] - In Europe, favorable pricing was observed at +4% in both France and Europe, with strong demand from SMEs and mid-market businesses [7] - Health premiums outside Europe grew by 13%, driven by strong performance in Mexico and Turkey [29] Strategic Direction and Industry Competition - The company is focused on executing its growth agenda, emphasizing technical and operational excellence, and maintaining a high level of capital strength [4] - Pricing remains favorable and is expected to be earned through next year, with inflation lower than expected, aligning with the company's plan [14] - The company is managing the underwriting cycle proactively, with selective growth and disciplined cycle management [6] Management Commentary on Operating Environment and Future Outlook - The environment remains supportive, with prices expected to remain favorable through next year, and inflation lower than anticipated [4] - The company is confident in achieving its margin improvement plan, particularly in Personal Lines, where a 1.7-point margin recovery was observed in 1H '24 [8] - The company expects to achieve underlying EPS growth in line with its 3-year plan target of 6% to 8% [15] Other Important Information - The combined impact of Hurricane Helene and Hurricane Milton was below €200 million pre-tax and net of reinsurance, reflecting reduced cat exposure and volatility [9] - The company maintains its annual nat cat budget of 4.5 points of combined ratio for the year [9] Q&A Session Summary Question: Nat cat exposure and new business margin [18] - The company confirmed it is on track with its 4.5% nat cat budget, including recent events in Europe [19] - New business margin decline was attributed to business mix and financial assumptions, with expectations of improvement in Q4 [20] Question: P&C margin improvement and Health growth [23] - The company is on track to deliver a 200 bps improvement in P&C combined ratio, with further improvements expected from expense management and underwriting [24] - Health growth outside Europe is driven by strong performance in Mexico and Turkey, with premiums in Mexico up 15% and Turkey nearly doubling [29] Question: P&C top-line growth and tax impact in France [31] - The company expects 4% to 5% top-line growth in P&C for 2025, driven by price increases and volume growth [32] - The impact of tax changes in France is expected to be limited, with France representing 25% of the company's business and profits [34] Question: Capital generation and EPS growth [37] - The company is on track to reach the upper end of its 25 to 30 points capital generation range [40] - Underlying EPS growth is expected to remain within the 6% to 8% range, with no significant upside anticipated [41] Question: Lapse experience and UK Health profitability [44] - Lapses have decreased in France and Italy, but remain high in Unit-Linked products in Italy [45] - The company is on track to restore profitability in UK Health by 2025 [42] Question: Nat cat losses and Solvency II reform [46] - The €200 million loss from hurricanes Helene and Milton reflects reduced exposure rather than reinsurance benefits [47] - Solvency II reform benefits are expected by the end of 2026, with limited impact on capital upstreaming [47] Question: Switzerland and North America Commercial lines [49] - Switzerland remains a profitable market with no need for remediation, while North America Commercial lines show favorable pricing trends, excluding Professional lines [50] Question: Discounting impact and casualty reserving [52] - A 25 bps decrease in interest rates would result in a €100 million impact on discount benefits [53] - The company is vigilant on casualty reserving but does not anticipate significant deterioration [53] Question: XL Reinsurance and third-party net inflows [59] - XL Reinsurance does not write Life & Health business [57] - Third-party net inflows in asset management were lower due to outflows and investor caution following the announcement of the AXA IM transaction [60]
AXA(AXAHY) - 2024 Q3 - Earnings Call Transcript