AXA optimistic as profit declines 32%

by Gill Montia

Story link: AXA optimistic as profit declines 32%

AXA has reported a 32% decline in net first-half profit, to €2.16 billion, having made an allowance of €1.14 billion in respect of falling asset values.

Group sales at Europe’s second biggest insurer fell by 2.9% to €49.32 billion; however operating profit rose by 3% on the same period of 2007, to €2.77 billion.

Notably, profit from the group’s damage insurance division reflected a low level of claims from natural disasters, rising by 18% in the first six months of the year.

Despite the slide, AXA expects to hit its target of €4.963 billion in operating profit for the year, matching its 2007 record.

The group’s chairman, Henri de Castries, says that AXA’s business strategy is built to withstand severe economic conditions and that the group remains well positioned to benefit from any upturn in the market environment.

Meanwhile, Europe’s biggest insurer, Allianz has announced that its goal to increase operating profit by an average 10% through 2008 and 2009 has become more difficult.

Allianz, which owns Dresdner Bank, has been instrumental in the group posting a 29% fall in second-quarter net profit, to €1.524 billion.