AXA Aims To Increase Exposure To Emerging Markets

AXA SA (AXA) Chief Executive Officer Henri de Castries said Tuesday the French insurance company had come through the financial crisis in better shape than some of its competitors and aims to build on that advantage by expanding in emerging markets.

"We are increasing growth in emerging markets, we want to reinforce our exposure," he said.

Over the long term, the company aims to generate 15%-20% of overall revenue from emerging markets. In 2008, 6% of its life and savings revenue on an annual premium equivalent basis came from such markets. For property-and-casualty revenue, the figure was 11%.

Speaking at an AXA investor day, de Castries said the company's A$12 billion joint bid with AMP Ltd. (AMP.AU) to buy out its AXA Asia Pacific Holdings Ltd. (AXA.AU) unit was an obvious part of its emerging markets strategy.

"We hope to be in a position to complete that, one way or another," he said.

Under the terms of the deal, AXA would get AXA Asia Pacific's Asian operations while AMP would take over its New Zealand and Australian wealth-management businesses.

AXA owns 53.9% of the unit, but the offer requires the agreement of shareholders representing 75% of voting shares. So far the minorities have rejected the bid.

Earlier this month, AXA launched a EUR2 billion capital increase intended to help fund the AXA Asia Pacific plan and other possible deals.

De Castries said that while some competitors are devoting time to rebuilding their balance sheets, AXA is able to focus instead on improving its operational efficiency. "The storm has confirmed the validity of the business model we chose years ago, even if in some areas we have suffered," he said.

The company had been helped by its geographical and product diversification and by not opting to become a bancassurer and offering full banking services along with its insurance operations, de Castries said. He said companies that had taken that path suffered or disappeared during the crisis.

"We have lessons to learn from the crisis ... we know our weaknesses and we are well on track for correcting them," he said.

De Castries said the company's U.K. business had been strengthened in a bid to lift earnings.

Nicolas Moreau, the CEO of AXA U.K. and Ireland, said he was confident the unit would hit its 2012 underlying earnings target of GBP325 million. Underlying earnings at the unit were GBP288 million in 2008, down from GBP354 million in 2007.

-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@dowjones.com

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