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Axa on track to meet full-year earnings target

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Axa XL says it is on track to meet an underlying earnings target of €1.2 billion ($1.86 billion) this year after a positive first quarter.

Total revenues grew by 2% to €31 billion ($48 billion) in the first three months of the year despite COVID-19 related restrictions.

Property & Casualty revenues were up 2% to €17.4 billion ($26.97 billion) while commercial lines revenue rose 4% to €11.6 billion ($17.98 billion), with growth across all geographies. Life & Savings revenues were stable at €8.6 billion ($13.33 billion).

“Axa XL performed well in the quarter, pursuing its underwriting discipline, achieving significant price increases, targeted exposure reductions and growing revenues,” Group CFO Etienne Bouas-Laurent said.

“This good performance was underpinned by sustained growth in our preferred segments.”

Favourable pricing continued through the first quarter and Mr Bouas-Laurent told investors “the outlook remains positive” while €1.5 billion ($2.32 billion) remained Axa’s “best estimate” for the cost of COVID.

“We still think it is the best view we have on our COVID losses so far. Of course there are still some uncertainties left,” he said.

At Axa XL, price increases on renewals remained strong in the first quarter, rising 15% in insurance and 11% in reinsurance.

Axa estimates a slightly higher-than-usual natural catastrophe charge in the first quarter, including from severe winter freeze events in Texas, though a more favourable than expected non-catastrophe loss experience would help to offset that.