By Amir Sadiq
AXA has recorded EUR1.5bn ($1.78bn) in COVID-19 claims in the first half of this year, which is in line with its earlier forecasts.
“The impact of COVID-19 on AXA’s earnings was in line with our previously published guidance. Commercial lines were the most impacted, notably at AXA XL. The rest of the Group was resilient, with the impacts from COVID-19 claims largely offset by lower frequency in motor and growth in health and asset management,” said AXA CEO Thomas Buberl.
The Group also reported that its net income decreased by 39% to EUR1.4bn with adjusted earnings dropping 51% to EUR2bn, reflecting lower underlying earnings as well as higher impairments in the context of financial market volatility linked to COVID-19.
Its underlying earnings decreased by 48% to EUR 1.9bn mainly driven by: P&C (-72%) mostly due to the impact of Covid-19 related claims; and Life and Savings (-9%) primarily linked to the extension of disability coverage in the context of COVID-19 and the decrease in annuities discount rate.
In light of the estimated impact of COVID-19 on its earnings in 2020, AXA’s management has withdrawn its Ambition 2020 underlying earnings per share and adjusted return on equity targets, whilst maintaining its Solvency II ratio and free cash flow targets.
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