AXA(AXAHY) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues increased by 2% to €79 billion, with a strong balance sheet reflected in a Solvency II ratio of 230% [4][18] - The company is on track to deliver earnings outlook of above €7.5 billion underlying earnings in 2023 [20] Business Line Data and Key Metrics Changes - Property & Casualty (P&C) revenues were up 7%, with commercial lines growing by 9% driven by price increases and volume [6][8] - Life revenues remained stable, with protection up 3% and capital-light general account up 12%, while traditional general account premiums were down 13% [11][12] - Health premiums were down 7% due to the non-renewal of two large international group contracts, but organic growth was 7% when excluding these contracts [13] Market Data and Key Metrics Changes - In the U.S., AXA XL Insurance saw price increases of 4% on renewals, with North America property prices up 19% [6][10] - In Europe, favorable price effects were noted at 5% in France and 4% across Europe [7] Company Strategy and Development Direction - The company focuses on core markets where it has leading positions, as evidenced by the acquisition of Laya in Ireland and the disposal of a joint venture in India [5] - The strategy includes reducing exposure in non-core markets and prioritizing profitable lines of business [5][19] Management's Comments on Operating Environment and Future Outlook - Management highlighted several headwinds for the second half of the year, including higher health claims frequency in the U.K. and elevated lapses in Italy [20][26] - The company remains confident in achieving its in-force management target of €30 billion to €50 billion by year-end [4] Other Important Information - The company has reduced its natural catastrophe exposure by approximately 35% this year, with a nat cat budget of 4 points for the year [9][23] - Average assets under management in Asset Management decreased by 5%, reflecting unfavorable market conditions, but net flows were flat [16][17] Q&A Session Summary Question: Nat cat budget allocation and Q4 outlook - Management confirmed that the nat cat budget is 4 points overall, with Hurricane Otis estimated to cost around €200 million, which is about 40% of the Q4 budget [22][23] Question: Headwinds in Q3 compared to H1 - Management stated that the headwinds in Q3 were consistent with those in H1, with no worsening in health claims or lapses [25][26] Question: Pricing trends in North America Professional lines - Management noted that pricing remains profitable despite increased competition and fewer business opportunities [24] Question: Capital generation expectations for Q4 - Management indicated that Q4 capital generation is expected to be in line with Q3, with no significant structural headwinds anticipated [56][58] Question: Regulatory attention on private assets - Management acknowledged increased regulatory scrutiny but noted no significant pressure affecting their asset management flows [56][59]