By Inti Landauro and Noémie Bisserbe
PARIS--AXA SA, Europe's second-largest insurer by market value,
said Wednesday that it expects the weakening euro against the
dollar and the Swiss franc to boost profitability this year, and
that currency gains offset the negative impact of low interest
rates on its earnings in 2014.
Net profit in 2014 rose to EUR5.02 billion ($5.67 billion) from
EUR4.48 billion a year ago, below analysts' forecast of EUR5.23
billion. Revenue rose to EUR91.99 billion from EUR91.22 billion in
2013.
The company's Chief Financial Officer Gérard Harlin attributed
the profit increase to the positive effect of currency swings, a
more efficient way in handling its existing business thanks to a
EUR1.6 billion cost-saving plan and an increased presence in
emerging markets.
He expected the trend to continue this year as the euro has
continued sliding against the U.S. dollar, the Hong Kong dollar and
the Swiss franc. He added that the company plans to keep expanding
in countries with faster economic growth.
"As we look ahead, we will continue to diversify our
geographical footprint and business mix, as well as further improve
our operational efficiency, which should help us perform well even
in a low interest rate environment," the company's Chief Executive
Henri de Castries said.
AXA, like its peers in Europe, has grappled with the eurozone's
uncertain investment market and low interest rates, which have hurt
its asset management and savings products. To revive growth, the
French insurer has been investing in fast-growing businesses and
emerging markets, and pulling out of parts of Europe, plagued by
sluggish growth.
Revenue at its life and savings division was unchanged at
EUR55.3 billion, while property and casualty revenue was 1% higher
at EUR29.5 billion.
Life and savings annual premium equivalent, known as APE, was up
6% on the year. APE measures new business growth for life insurance
by combining the value of payments on new regular premium policies,
and 10% of the value of payments made on one-time, single-premium
products.
It said its solvency ratio--a key measure of an insurance
company's financial strength--was 266% at the end of December, up
from 221% a year ago.
The company's board proposed a dividend of EUR0.95 this year, up
from EUR0.81 last year.
Write to Inti Landauro at inti.landauro@wsj.com and Noémie
Bisserbe at noemie.bisserbe@wsj.com
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