AXA, the second biggest insurer in Europe, posted a net profit of EUR2.14 billion ($2.42 billion) in 2018, a drop of 66% from a year earlier, according to its financial report released Feb 21.
The figure is below the expectations of analysts which is closer to EUR2.5 billion ($2.8 billion), according to Infront Data for Reuters. However, AXA’s underlying earnings reached a record level, increasing by 6% to EUR6.2 billion ($7 billion)
The French insurer blamed their financial woes on the reduced ownership of its US unit, which it floated last year and a string of catastrophes during the year. Natural disasters cost the company about EUR2 billion ($2.3 billion) in 2018, which included California’s wildfires, which required the company EUR335 million ($379.8 million), and Hurricane Michael at EUR261 million ($296 million).
AXA’s Solvency II ratio, which measures the available capital as a proportion of the required minimum, was 193%, down 12 points as compared to the figure at the end of 2017.
However, despite hearing the news, shares in the insurer had increased 1.8% in Paris by lunchtime of Feb. 21 but still down 15% over the past 12 months.
Thomas Buberl, AXA’s CEO, said the insurer had been hit by the market volatility, which included natural catastrophes as reflected in the group’s share price. But Buberl was optimistic that, based on the group’s stock performance, investors’ interest in Axa “has increased significantly.”
Under Buberl, AXA has been undergoing an extensive restructuring increase its global reach. It also aims to strengthen its health, property, and damage insurance units.