AXA H1 net income rises 25 pct

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Europe's second-biggest insurer, reported a 25 percent increase in first-half net profit on a comparable basis, boosted by strong earnings growth and a favorable impact of lower interest rates on the value of its financial assets.

Net income reached 3.01 billion euros ($4.03 billion) in the first half, also benefiting from lower restructuring costs, AXA said on Friday.

The result beat analysts' average forecast for net income of 2.696 billion euros, according to a poll of 20 analysts provided by the company.

AXA is seeking to lift profitability through tariff hikes and higher-margin products while reducing its costs. The company said in a statement it was raising its cost savings target to 1.9 billion euros by 2015 from 1.7 billion previously.

Total revenue rose 2.0 percent on a comparable basis to 49.71 billion euros, and underlying earnings rose 8.0 percent over the period to 2.78 billion.

Earnings benefited from particularly strong growth in AXA's life and savings business, but were negatively impacted by higher natural catastrophe charges in its property and casualty line stemming from June hailstorms in Europe, said finance head Gerald Harlin.

"We are confident in our capacity to grow in 2014. Compared to 2013, we expect to increase new business volume in life and savings and grow casualty revenues," Harlin told journalists on a conference call.

He said the crisis between Russia and Ukraine had only a minor impact on the group and that so far its Russian business was doing well.

In terms of its balance sheet, AXA's gearing was stable at 24 percent, in line with the group's target of 23-25 percent.