Axa CEO Says Optimizing Capital To Avoid Cash Call
April 02 2009 - 11:14AM
Dow Jones News
French insurance company Axa SA (AXA) said Thursday that its
solvency ratio is above the regulatory minimum and that by
optimizing capital it aims to avoid the need to raise new
funds.
According to a slide presentation by Chief Executive Henri de
Castries on Axa's Web site, the company's solvency ratio under
Solvency I rules was 127% at the end of 2008, compared with a
regulatory minimum of 100%.
Axa spooked investors in February when it said that 2008 net
profit fell 84%, prompting it to slash its dividend and prepare for
a possible capital increase in what it warned would be a
challenging 2009.
The company said at the time that it will ask shareholders to
approve the issue of up to EUR2 billion in preference shares, which
de Castries insisted was "an insurance policy" that would only be
used as a last resort to defend the company's finances if the
crisis deepened.
In Friday's presentation, Axa said its diversified business
model would help bolster it against tough market conditions, with
asset management accounting for 13% of underlying earnings, life
and savings contracts 32% and property and casualty 55%.
It also has a broad geographical spread, with only 24% of
overall revenue generated in its domestic market.
De Castries said Axa aims to increase profit rather than lift
market share.
Company Web site: www.axa.com
-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748;
digby.larner@dowjones.com