(AOF) – Axa has entered into a share buyback agreement with an investment services provider under which the insurer undertakes to buy back its own shares for a maximum amount of 1.6 billion euros. This amount includes the share buyback of 1.1 billion euros, in accordance with the new capital management policy, as announced on February 22, and the anti-dilutive share buyback amounting to 0 .5 billion euros following the reinsurance agreement for a life insurance portfolio at Axa France. It was announced on December 20.
Under the terms of this agreement, the share repurchase is expected to begin on February 26, 2024 and end no later than August 5, 2024. For each day of the repurchase period, the price per share to be paid by the insurer will be determined based on the volume-weighted average share price.
Axa has confirmed its intention to cancel all shares repurchased under this share buyback program.
AOF – LEARN MORE
Key points
– World number one insurance company born in 1982;
– Turnover of €102 billion, split between France for 26%, the rest of Europe (34%), Asia (16%), international (7%) and AXA XL (damage for businesses, 20%);
– Three major activities: corporate damage (33% of turnover) & personal damage (17%), life, savings and retirement (33%), ahead of asset management;
– Business model: develop health and welfare, simplify the customer experience, strengthen underwriting performance, maintain No. 1 position on climate issues, increase cash flow;
– Split capital, with an employee shareholding share of 4.16% (5.69% voting rights), behind the AXA mutuals (14.95% and 24.75%), Denis Duverne chairing the board of administration of 16 members, Thomas Buberl being general director;
– Solid financial situation despite the decline to €45.4 billion in equity affected by unrealized capital losses of €27.1 billion, with a debt ratio of 27.1%, a solvency II ratio of 215% and cash flow of €5.5 billion.
Challenges
–
Environmental strategy measured using the AXA Index for Progress:
– carbon neutrality 2025 via the reduction of operational emissions (energy, travel, digital) and the compensation of residual emissions.
– 20% reduction in the carbon footprint linked to investments between 2021 and 2025 and green investment of €26 billion between 2020 and 2023,
– launch of green loans, €1.3 billion in green investments,
– fight for biodiversity through subscription and investment policies
–
3 areas with strong resilience: France, Europe, Asia;
– Simplification of the group, through refocusing and disposals (€28 billion collected out of the target of €30 to 50 billion);
– Resistance to economic cycles through the rise of health and proactive management of inflationary risks.
Challenges
– Monitoring of profitability indicators or combined ratios (93.7%);
– Transformation of the holding company into the group’s reinsurer, i.e. $2 billion in additional cash flow by 2025;
– Diversity in growth rates between health then damage and decline in asset management activity;
– After a 1% increase in revenues in the 1st quarter, 2023 objective of operating profit above €7.5 billion per share, growing above the range of 3% to 7%;
– 2022 dividend of 1.7%, up 10% and share buyback program of €1.1 billion.
A great dynamic of development for French life insurance
The progression of life insurance continues over the months. Over the first four months of the year, contributions reached 53.7 billion euros, a level not seen in more than ten years. At 10.5 billion euros, net collection also returned to its highest level since 2011 over a similar period. Ultimately, at the end of April 2022, outstanding life insurance contracts reached 1,847 billion euros, up 1.1% year-on-year. These good performances are partly linked to the growing success of the PER (Retirement Savings Plan). Since the start of 2022, the PERs marketed by an insurer have shown 592,000 additional policyholders and 9.3 billion euros in payments. At the end of April 2022, 3.2 million policyholders held a PER, which represented an outstanding amount of 39 billion euros. Without taking transfers into account, 87% of new PER holders (at the end of December 2021) had taken it out with an insurer.