U.S. News

AXA 2006 Sales Rise, Shares Buoyed


AXA, Europe's second-biggest insurer, reported a 9.9% rise in 2006 sales on Thursday as robust market conditions spurred higher sales of products throughout the sector.

Total sales rose to 78.775 billion euros ($101.9 billion), with turnover boosted by growth across its main businesses.

Life and savings new business sales on an annual premium equivalent (APE) basis -- a standard industry measure used to iron out market volatility -- rose 13.9% to 6.234 billion euros. In the final 2006 quarter APE sales rose to 1.76 billion euros from 1.41 billion euros in the third quarter.

Eleven analysts polled by Reuters gave an average forecast of 6.12 billion euros for annual premium equivalent sales.

Property and casualty revenues for the year rose 4.9% to 19.793 billion euros, slightly below an average forecast of 19.80 billion euros.

AXA shares rose as much as 2.4% in early morning trade. The stock was up 1.95% at 32.97 euros by 0815 GMT, slightly outperforming a 1.1% rise in France's benchmark CAC-40 index.

UBS "Buy" Rating

Investment bank UBS raised its price target on AXA to 36.10 euros from 34.50 euros and kept a "buy" rating on the stock.

"AXA sales are quite a bit above and they are confident for the next year, which seems to be good news, but not wonderful. It should follow the market today," said a Paris-based trader.

Insurers have benefited from rising stock markets that help them sell savings products which often invest in equities, and last month British insurers Legal & General and Friends Provident both reported a surge in 2006 revenues.

"Our performance in 2006 demonstrates once again that AXA, acting on the structurally growing financial protection market, is capable of meeting its long-term top line growth targets," AXA Chief Executive Henri de Castries said in a statement.

Last year, AXA bought Swiss insurer Winterthur for around $11 billion and the company has said it will continue to make selective acquisitions.

AXA also aims to triple its earnings and double its revenues by 2012 as part of a long-term strategy plan.

AXA shares have risen by around 8 percent since the start of 2007, outperforming a 2% gain in the DJ Stoxx European insurance sector.