A particularly strong showing from AXA UK's Life & Savings business helped the group to weather the fall out from the June floods.
In the UK & Ireland, underlying earnings for the group were £160m for H1 2007, 3% ahead of H1 2006 levels at £156m. This was despite a total General and Health insurance underlying earnings decrease from £124m in H1 2006 to £83m in H1 2007 (excluding the earnings of general insurance brokers).
The drop was a result of two adverse weather events; storms in January and flooding in June (combined total £115m before tax). AXA estimates the cost of the July floods is approximately £120m (before tax).
However, AXA UK’s Life & Savings business, including the wealth management, corporate and protection business units, had a strong H1. It announced revenues (APE) increased 69% to £553m over the period. On a like for like basis (including appropriate figures for Winterthur), this amounts to a rise in APE of 26% (up from £438m in H1 2006).
The group says the overall improvement is largely due to the continued strength of AXA’s individual pensions offering, along with further worksite sales into existing accounts, the contribution from Winterthur’s wealth management business and higher than expected offshore bond business.
Including relevant figures for Winterthur, new business value (NBV) increased by 51% to £77m in H1 2007 from £51m for H1 2006. Excluding Thinc Group, underlying earnings of £97m in H1 2007 improved by £42m from H1 2006 helped by the growth in fees and revenue, one off tax benefits and improved with profit bonus payments.
Nicolas Moreau, group chief executive of AXA UK, comments: “It is very pleasing to be able to announce a set of results which show strong growth as well as an improved level of underlying earnings despite the destructive floods that we have seen during June. Our efforts are now focused on helping those customers who have been badly affected by these floods and by the more recent devastation seen in parts of the West Country.
“We have made good progress with our aspiration of becoming the trusted market leader, an objective I am absolutely committed to delivering. I am excited by the coming launch of a range of innovative products and services, including Wrap and new enhancements to our wealth management proposition, including a new US style ‘Accumulator’ income drawdown facility with guarantees.”
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