Axa profits surge to €1.4bn despite total sales remaining flat

AXA, the French insurance group, yesterday reported greatly improved profits but flat sales for the first half of this year, both globally and in the UK.

AXA, the French insurance group, yesterday reported greatly improved profits but flat sales for the first half of this year, both globally and in the UK.

The group's total sales crept ahead by only 0.4 per cent to €37.3bn (£24.7bn) while earnings surged by a third to €1.4bn. In the UK, underlying earnings were £58m higher at £99m, on the back on gross revenues only four per cent better at £3.6bn.

Henri de Castries, the group chief executive, said: "The very strong earnings momentum is the result of our efforts to improve our operating performance. These results, strong in all business segments, highlight the benefit of our unique business focus on financial protection combined with a good geographical diversification."

He underlined his determination to spread abroad with a decision to pay A$3.1bn (£1.16bn) for the 48.4 per cent of Axa Asia Pacific Holdings that it does not already own. He added that the whole region - in particular China - had attractive long-term opportunities. The deal will be structured as a scheme of arrangement which will be subject to the approval of minority shareholders and the Australian courts. Last month Axa bought Mony Group in the US for $1.48bn (£810m).

"Axa is firing on all cylinders at the moment, with strong life insurance due to good unit-linked sales," Nick Holmes, at Lehman Brothers, said. "In property and casualty, there's been a good improvement in underwriting."

Operating income at the property and casualty division rose 40 per cent to €562m.

The UK chief executive, Dennis Holt, said that in Britain the group had switched from with-profits to unit-linked policies, moved from individual to group pensions, and would launch an all-embracing protection product in the autumn.

In Paris, Axa shares fell 2.2 per cent to €16.40, valuing the company at €31bn.