AXA Switzerland has reported its financial results for 2024, showcasing a mix of growth and challenges. Despite an increase in business volume, the company faced a decline in profits due to external factors such as storm damage and rising claims costs.
Financial Performance Overview
AXA Switzerland reported a profit of 781 million francs for 2024, reflecting a 3.3 percent decrease from the previous year. This decline occurred alongside a significant increase in business volume, which rose by 5.9 percent to 6.19 billion francs. The insurer attributes the profit drop to substantial storm damage and rising claims costs that have negatively impacted its financial results.
In the non-life insurance sector, AXA Switzerland saw a premium volume increase of 5 percent, totaling 4.07 billion francs. The company has successfully enhanced its market position, particularly in the corporate customer segment, which grew by 4 percent to CHF 2.06 billion. Growth in group personal insurance has been a key factor in this success, while the private customer business also experienced a notable rise, with premiums increasing by 5 percent to CHF 2.01 billion.
Challenges and Profitability
Despite the increase in premium income, AXA Switzerland faces challenges due to high storm damage and a rise in both the frequency and cost of claims across various lines of business. The combined ratio, an important measure of an insurer’s profitability, worsened to 90.4 percent, an increase of 0.8 percentage points from the previous year. This indicates that while the company is generating more premium income, the costs associated with claims are also rising, putting pressure on overall profitability.
In the individual life insurance sector, gross premiums surged by 12 percent to CHF 1.18 billion, while group life premiums increased by 2 percent to CHF 838 million. Health insurance premiums saw remarkable growth of 25 percent, reaching CHF 112 million, highlighting strong demand for life and health insurance products, even as the company deals with the financial implications of increased claims in other areas.
Asset Management Growth
In asset management, AXA Switzerland reported a 12 percent increase in assets under management for third-party customers, now totaling CHF 52.3 billion. This growth is attributed to a well-balanced investment strategy and effective portfolio management, showcasing the company’s ability to navigate the complexities of financial markets.
The merger of AXA Real Estate Fund Switzerland in March 2024 has also positively impacted the financial performance of the asset management division. This strategic move reflects the company’s commitment to enhancing its offerings and adapting to market demands.
Parent Company Performance
Meanwhile, the French parent company has experienced a significant profit increase, with net profit rising by 10 percent to nearly 7.9 billion euros in 2024. This strong performance has enabled the parent company to announce a nine percent increase in dividends, raising it to 2.15 euros per share. Additionally, a share buyback program valued at 1.2 billion euros is planned, further demonstrating a commitment to returning value to shareholders.
The anticipated sale of AXA Investment Managers to BNP Paribas is expected to generate an additional 3.8 billion euros, further strengthening the parent company’s financial position. This contrasting performance between AXA Switzerland and its parent company highlights the challenges faced by regional insurers in a volatile market environment.
Future Outlook
While AXA Switzerland is expanding its premium volumes and maintaining a strong market presence, the impact of external factors such as natural disasters and rising claims costs cannot be overlooked. The company’s ability to adapt to these challenges will be crucial for maintaining profitability and ensuring sustainable growth in the future.
As the insurance landscape continues to evolve, AXA Switzerland’s focus on enhancing its product offerings and improving operational efficiency will be essential. The growth in health and life insurance segments indicates a shifting consumer preference that the company can leverage to its advantage.
However, ongoing pressures from claims costs and market volatility will require strategic planning and agile responses to safeguard its financial health. In summary, AXA Switzerland’s recent financial results reflect a complex interplay of growth and challenges, necessitating vigilance in managing claims and operational costs.
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