AXA Insurance: Historical and Current Financial Performance

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Introduction
The insurance industry has been experiencing a significant change in the course of the most
recent couple of years: a difficult budgetary condition with proceeded with low loan costs,
expanding rivalry from new contenders crosswise over business sectors, and stamped
changes as far as client desires (Fang, 2016). In parallel, the requirement for insurance and
related administrations are developing, driven by the present societal
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530Coursework assignment 2 answer template
conduct changes, environmental change, just as the advancement of innovation, among
others (Koijen, 2016). So as to react to these improvements and seize these new chances,
AXA (organize in 1985) is continually re-examining and extending its value chain with the
desire of turning into a genuine accomplice for its customers. Moving from a methodology
based on risk supporting to a rational depending on biological systems, the Group is logically
broadening towards a universe of administrations: therefore, offering to expand reciprocal
administrations notwithstanding insurance coverage, empowering customers to acquire from
their association with their safety net provider (AXA, 2018).
AXA insurance is a leading brand across the world. The company is building its future
according to its clear strategic view. The group is leading the haul in the insurance industry
with its more than €100 million customers, €102.9 billion revenue, €6.2bn underlying earning
and with €2.1 bn net income. This report is going to assess the company’s historical financial
performance and also analyses its current financial performance and will make some
recommendations for future financial performance to expand the business and meet its
target for Ambition 2020 (AXA group, 2018).
AXA Insurance
AXA business insurance is a UK based insurance company and having a subsidiary
company in 61 different countries across the globe. The company provides services to 105
million customers and having 171000 employees in all over the branches (Press Release ,
2019).
The company established its market in Western Europe, Asia, and other Pacific markets and
also in North America. AXA group aims to strengthen its growth in the coming years by
increasing its presence in the high-growth market (AXA Financial protection, 2011). Its
revenue is around 102, 9 million gross revenue increment around 4% every year, all market
recorded strong growth. AXA’s total underlying earnings are 6.2bn, which includes
geographical underlying earning is: in France 1.6 billion, Europe 2.5 billion, and Asia 1.1
billion.
However after acquisition of AXA Xl the company Net income fell from 66 percent to 2.1
billion, the growth in adjusted earnings was more than offset by the deficiencies of goodwill
and AXA Inc. in group share (3.0 bn) and other intangible assets linked to conversion of its
Swiss group, as expected, higher restricting costs and exceptional charges, engaged to the
IPO of AXA equitable Inc. and the amalgamation with XL group, combined with the negative
effects from the changes in the fair value of financial assets and spinoffs (AXA group, 2018).
Historical financial performance
AXA is a leading brand across the world. The company is performing tremendously in
insurance sector. AXA By protecting organizations and clients from ordinary dangers, safety
net providers give the genuine feelings of serenity required for business enterprise and
advancement. Insurance arrangements help organizations oversee dangers, support
development and look for new chances. By pooling dangers and premiums to share the
favourable luck of the dominant part with the few confronting challenges, protection ensures
people and fortifies a feeling of network.
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530Coursework assignment 2 answer template
Company is increasing its market performance day by day and working as per its target of
Ambition 2020 (AXA group, 2018). However, its performance reached nearby the target. As
its revenue 2016 was around 100,193 which decreased in 2017 was 98.5 bn which however
it increased by 4% as 1.02.9 bn in 2018. AXA’s net consolidated income in 2016 was 5829
which increases 6209 in 2017 (Thomas Buberl, 2018).
The proposed dividends of 2017 payable in 2018 have increased by 9% to 1.26 per share,
which is equal to 49% of the pay-out. The companies underlying earnings per share is
around 7 percent, achieved the estimated target, which was between 3% to 7% in 2015-
2020, Free cash flow in 2017 was 6.3bn which is far away from the target (28-32 bn) in
2015-2020. AXA’s estimated ROE in 2017 was 14.5 percent, achieved the estimated target
of 12%- 14%. Solvency ratio is around 205% in 2017 between the estimated targets of
170%- 230%, however, the solvency ratio decreased in 2018 by 12 percent (AXA group,
2018).
AXA acquired Maestro Health Inc. in 2017, which accelerating innovation at the company
and reflects the company’s intentions to new achieve new strategies. Further to its choice in
2016 to strip from the tobacco business, in 2017 AXA supported the world's first worldwide
speculator announcement in help of the World Health Organization Framework on tobacco
control and in help of related government activity. AXA additionally effectively propelled
health care and counteractive action items to serve the white collar class in developing
nations, achieving 8 million policies before the finish of 2017 (Businesswire, 2018).
Notwithstanding these critical achievements in AXA's change venture, the Group figured out
how to convey a strong act last year. In 2017, its profit went over the €6 billion limits without
precedent for the Group's history. Additional proof that its business needs are mirrored
organization's general execution is that few of its key portions have recorded solid
development figures for 2017, similar to medical coverage, which incomes developed at a
solid 6% a year ago. With hidden income per share up 7%, balanced profit at 14. 5%,
working free money streams at €6. 3 billion and a dissolvability proportion up 8, at 205%,
AXA have achieved several target and at some point AXA is nearby the target, and
somewhere the company overachieved its money-related targets, which affirms the direction
to accomplish its estimated target of 2020 (AXA group, 2018).
Analysing Current financial performance
In 2018 AXA’s IPO of US life insurance and the acquisition of AXA XL contribute to the
growth of the company and helps to achieve the objectives to reduce the financial risks and
manage the balance between financial risks and insurance, however after this acquisition
company’s net profit fell by 66bn (AXA.Com, 2019). According to its chief executive Thomas
Burbel AXA is experiencing a profound rebuilding gone for making the French gathering
progressively worldwide and more grounded on wellbeing and property and harm insurance.
The Acquisition of AXA XL helps the organizations to lead the haul and become the global
leader and extends its assortment of solutions and services to the big number of clients.
In the year 2018 AXA delivered operations according to its expectations and grow on its
Ambition 2020, its earnings increased as per the key geographical and segments, more than
6 bn for this second successive year. AXA’s business priorities leading it better performance
in the market. The annual financial report of AXA as demonstrating the strong growth figures
such as health insurance the revenues of which grew at a healthy 7%,
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