AXA’s XL division at the center of the annual results – Results overview

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By Ed Frankl


AXA SA is due to publish its annual results on Thursday. Here’s what you need to know:


NET PROFIT FORECAST: The French insurer is expected to post annual net profit of 6.96 billion euros ($7.88 billion), compared to 3.16 billion euros in 2020, according to an analyst consensus provided by FactSet.


REVENUE FORECAST: The Paris-based company is expected to report gross revenues of 99.78 billion euros for 2021, compared to 96.72 billion euros the previous year.


WHAT TO WATCH:


-AXA XL: The French company’s net profit is expected to double in a year as it recovers from a pandemic in 2020, driven by its US division AXA XL. The insurer has targeted 1.2 billion euros of underlying profit in the XL business for the 12 months, compared to a loss of 1.40 billion euros the previous year. Given that there has been no further adverse news regarding pandemic-related claims, there could be releases of Covid-19 supplies from its business lines, Jefferies analysts say, making the goal that can be achieved. A calmer fourth quarter in terms of losses from natural disasters is another reason why it should reach 1.2 billion euros, according to Citi.


-CASH RETURNS: AXA is in the midst of a €1.7 billion share buyback launched in November, which could be the first of many, according to Jefferies. While there is no news on further buyback programs on the annual results, Jefferies says it expects buybacks to eventually recur at 1 billion euros per year. The dividend could also surprise positively, add Citi analysts.


Write to Ed Frankl at [email protected]

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