AXA's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

The AXA Group is recognised as the number one insurance company in Europe. It operates in several countries and had 96,595 employees worldwide at the end of 2020. During this year, the company's activity was disrupted by the Covid-19 health crisis. On the commercial front, however, the insurer showed resilience with good performances.

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AXA's market cap, dividends, sales and earnings in 2020
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AXA's annual turnover in 2020

For the financial year 2020, the AXA group achieved a turnover of 96.7 billion euros. On a reported basis, revenues were down sharply by 7%. On a constant exchange rate basis, annual revenues declined by a limited 1%. The target segments (health, commercial property and casualty insurance and personal protection) posted estimated revenues of € 61.57 billion, down 1%.

At constant exchange rates, they grew by 3% year-on-year. By business line, property and casualty insurance grew by 1% over the year to 48.7 billion euros. This performance was driven by commercial lines (+2%), which benefited from positive price effects, particularly at AXA XL.

It was partially offset by a decline (-1%) in personal insurance. This was mainly due to lower sales in several countries during the containment periods. Health insurance, on the other hand, grew by 6% in 2020. This evolution is favoured by the good dynamics noted in all the company's lines and geographical areas.

On the other hand, the life and savings business recorded a 6% drop to 31.5 billion euros over the year. 31.5 billion for the year. This underperformance mainly reflects the fall in sales of general account savings products in France and Europe. They were heavily affected by the unfavourable effects of the health crisis.

14.7 billion for the year, up 6%. Lastly, the asset management business grew by 4% to 1.269 million euros over the full year. It was driven in particular by the increase in average assets under management, supported by strong net inflows.

 

Consequences of claims related to the health crisis

The year 2020 was marked by an unprecedented economic crisis. The Covid-19 pandemic weighed on the AXA Group's business last year. It had a strong impact on the operating result for property and casualty insurance and solidarity measures. 1.5 billion (after tax and net of reinsurance).

However, this impact is in line with the indications given by the company in its press release of 3 June 2020, and on the occasion of the presentation of its half-yearly results for 2020. In addition, in the second half of the year, the new containment measures did not have a major impact on the group's activity.

Indeed, the favourable effects relating to the fall in frequency in personal insurance offset the additional claims in commercial insurance.

 

Performance of other economic indicators

For the full twelve months of the year 2020, AXA Group underlying earnings amounted to 4.26 billion euros. 4.26 billion, down 34% from the previous year ('6.45 billion). It was affected by the difficulties of the property and casualty insurance business, which recorded a huge drop.

This decline is mainly due to the impact of claims related to the coronavirus health crisis. They are estimated at 1.53 billion euros. On the other hand, the expenses related to natural catastrophes beyond the normalised costs are estimated at 502 million euros. It should be noted that this normalised level of natural catastrophes represents almost 3% of the gross premiums recorded during the financial year.

The insurer's net income amounted to 3.16 billion euros in 2020, compared to 3.85 billion euros in the previous year, a decline of 18% over the one-year period. This partly reflects the decline in operating income. It also reflects the negative impact of the fall in the market value of invested assets recognised at fair value.

 

Operating profit by group activity

In 2020, the operating income of the property and casualty business stood at 1,644 million euros. 1,644 million. It was heavily impacted by the health crisis and therefore showed a 51% drop compared to last year.

2,338 million for the financial year 2020. 2,338 million, down 7% year-on-year. 693 million.

The asset management business saw its operating profit increase by 6% over the year to 279 million euros. Finally, the holding activity's operating income increased by 15% to reach -754 million euros in 2020.

 

AXA's financial structure at year-end

At December 31, 2020, AXA's shareholders' equity amounted to 71.6 billion euros. 1.7 billion compared to the same date last year. The Solvency II ratio (a measure of the company's financial strength) stood at 200% at the end of the 2020 financial year.

Compared to its level at the end of September 2020, it has improved by 20 points. At the end of the 2020 financial year, the company's gearing ratio is 26.8%, down 2 points year-on-year. This mainly reflects the favourable effect of the repayment of €1.7 billion in subordinated debt.

At the end of December 2020, the cash position of the Axa S.A. holding company amounted to 4.2 billion euros. This is well above the company's expectations. The company was aiming for an amount between 1 billion and 3 billion euros.

 

AXA's dividend and market capitalisation in 2020

The dividend proposed by the AXA Group for the financial year 2020 had exceeded all expectations. Indeed, at the Annual General Meeting of Shareholders held on April 29, 2021, the company's Board of Directors announced its intention to pay a dividend of 1.43 euros per share.

The payment of this dividend was made on 11 May 2021. In addition, the company is present on the equity markets. It is one of the CAC 40 companies. As of October 2020, its market capitalisation is estimated at EUR 39.25 billion.

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