French insurance company Axa SA (AXA) said that the financial crisis still hangs over its 2009 outlook, but that its capital position is strong enough to absorb serious market shocks without raising fresh funds.

In slides made available on the company's Web site Thursday ahead of its annual general meeting, Axa said the outlook for its life and pensions business was mixed, with falling asset values partly compensated by action it has taken to improve its U.S. variable annuities business.

Axa said its non-life business is holding up well in terms of volume and profitability.

Later Thursday Axa shareholders will be asked to authorize the possible launch of up to EUR2 billion in preference shares. The company announced the plan in February when it posted an 84% net profit decline in 2008.

At the time, Chief Executive Henri de Castries insisted the move was "an insurance policy" that would only be used as a last resort to defend the company if the financial crisis deepened.

At 1212 GMT, Axa shares were up EUR0.86 or 7,4% at EUR12.43, outperforming the Stoxx Europe 600 insurance index which was up 4.4%.

Company Web site: www.axa.com

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