Axa's 2006 Profit Beats Predictions, Rising 18%
French insurance giant AXA said Thursday that improving sales in its life insurance and asset management businesses helped lift 2006 profit 18%.
Beating analysts' predictions, AXA's net income rose to 5.09 billion euros ($6.69 billion) last year from 4.32 billion euros in 2005. A Dow Jones Newswires poll gave an average net profit forecast of 4.89 billion euros ($6.43 billion).
AXA, France's biggest insurance company by market capitalization, said underlying earnings -- which exclude capital gains and are considered a key measure of insurance company profitability -- were up 20% percent at 4.01 billion euros.
Life and savings products were the main contributor to underlying earnings, rising 20% to 2.33 billion euros ($3.06 billion) from 1.93 billion euros the year before.
Sales of life and savings products were strongest in Britain. The United States saw strong sales growth of variable annuities and life insurance contracts, while French life and savings also posted strong sales growth, the company said.
In addition, life and savings sales enjoyed a boost at all insurance companies operating in France because of taxation changes on home purchase savings plans, known in France as PELs.
In June, AXA agreed to buy the Winterthur insurance company from Credit Suisse Group for 7.9 billion (US$10.38 billion) in cash, giving it a major presence in Switzerland and bolstering its activities elsewhere in Europe and emerging markets.
AXA said Thursday that it aims to generate 350 million euros ($460.08 million) in savings from the deal by 2010, up from the 280 million euros ($368.06 million) forecast when the acquisition was announced. The company said in a statement that it will recommend a 2006 dividend of 1.06 euros, up 20% from the previous year.
AXA didn't give a breakdown of second-half earnings.