AXA

Recommendation history

• H1 2023BuyAXA delivered a strong H1: gross written premiums rose 2% to €55.7bn, underlying earnings reached €4.1bn, underlying EPS increased 8%, and Solvency II strengthened to 235%. P&C was the engine, with a 90.9% combined ratio and AXA XL earnings up 35%, supporting confidence in exceeding the €7.5bn 2023 underlying-earnings target; however, Life & Health earnings fell 13%, UK health claims remain elevated, and serious claims were higher than expected. Overall, the capital strength and underwriting momentum justify a buy, albeit with execution risks in Health and limited visibility on the post-2023 strategy.
• 2023-02-23BuyBuy: AXA delivered €7.3bn underlying earnings (+4%), +12% underlying EPS, 14.5% ROE and 215% Solvency II, while raising the dividend 10% to €1.70 and announcing a €1.1bn buyback. The investment case is strong cash generation, improving P&C pricing and a 2023 target of a 93% combined ratio, but investors must discount the pending 9-point solvency drag from regulatory changes, reserve/IFRS 17 uncertainty and elevated catastrophe exposure.
• 2022-11-03HoldHold: AXA delivered solid 9M22 momentum, with revenue of €78 billion (+2%), Solvency II at 225%, strong pricing and €18 billion of third-party asset-management inflows. However, Hurricane Ian cost €400 million net of reinsurance, inflation is beginning to outrun frequency benefits in France and Europe, and management gave no earnings upgrade or quantified 2023 Nat Cat budget; the risk/reward is balanced rather than a clean buy.
• 2022-08-03BuyBuy: AXA delivered 7% organic underlying-earnings growth, 11% underlying EPS growth, 15.8% underlying ROE and a 227% Solvency II ratio, while launching a €1 billion buyback. The mix shift toward commercial P&C, health, capital-light life products and alternatives is working, but the 1% top-line growth, softer Motor pricing, seasonal H2 catastrophe risk and scenario-based €300 million Ukraine provision temper the upside.
• H1 2022BuyBuy: AXA delivered a strong H1 2022, with revenue up 1% to €55bn, underlying earnings up 4% to €3.9bn, underlying EPS up 11%, and solvency rising to 227% even after including the planned €1bn buyback. The investment case is supported by profitable growth in health (+13% revenue), commercial P&C (+4%), disciplined capital release and higher reinvestment yields, but inflation, catastrophe exposure and the unresolved Ukraine reserve create meaningful near-term uncertainty.
• Q1 2022HoldAXA’s operating momentum is strong but not enough for a clean buy: 1Q revenue rose 1%, P&C 2%, Health 6%, and AXA XL renewal pricing reached +10%, while Solvency II improved to 224%. However, AXA XL insurance revenue was flat despite pricing, Nat Cat exposure was cut 40%, and management could not quantify the Ukraine loss until H1; hold pending clearer loss and profitability disclosure.
• 2022-02-24BuyAXA merits a buy: FY21 delivered €100bn revenue (+6%), normalized underlying earnings growth of 9% and 217% Solvency II, while management expects to remain toward the high end of its 3%-7% underlying EPS growth framework. The main tension is earnings quality—€1.4bn of excess-reserve releases and €1.5bn of market-related gains supported results—but risk has been materially reduced through a 40% AXA XL reinsurance Cat exposure cut, disciplined underwriting and substantial prospective cash generation.