EuroBusiness Media (EBM): AXA, a world leader in insurance and asset management, reports results for the full year 2012. Henri de Castries, welcome. You are the Chairman and CEO of AXA. What was the performance of the Group in 2012?
Henri de Castries: The performance of the Group in 2012 has been solid, even very solid, in an environment which has not been easy every day. This is reflected by the increase in revenues. They are growing by 5% year-on-year. And by the increase in the number of clients, we are reaching the level of 102 million clients for the first time in history. Businesses have been performing well in the three core businesses: Life, Health & Protection, Property & Casualty, and Asset Management. On the Life, Health & Protection side, revenues are growing, and earnings are growing, because we have been increasing the number of our clients, and because margins have been improving due to a better business mix. On the Property & Casualty side, revenues are increasing and through a better underwriting, a better claims management, and also a favorable pricing cycle, the combined ratio has been improving. Last but not least, on the Asset Management side, we have benefited from net positive inflows during the last part of the year, and from the fact that the level of fees we've been extracting from the assets we are managing has been increasing over the year. Overall, this is leading to a 9% progression in underlying earnings. Adjusted earnings are progressing even more. They are progressing by 28% year-on-year because we have been able to extract more capital gains from the assets we manage. All this is leading us to propose to the shareholders’ meeting an increase in the dividend from 69 to 72 cents and will also enable us to reinforce further an already very strong balance sheet through the retained earnings. So, a solid year, with a good performance, I think.
EBM: Two years after the launch of your strategic plan with a view to 2015, Ambition AXA, what is your update today?
Henri de Castries: Well, I think the update is pretty simple. These numbers are showing that we are delivering on Ambition AXA, and if you look at the three core actions which build Ambition AXA: on the efficiency side, we’ve been saving approximately €400 million euros in expenses, which is slightly more than anticipated, and this leads us to revise up a little bit what we think we will have extracted between 2010 and 2015, so it’s going to be €1.7 bn instead of €1.5 bn. On the acceleration mode, because we thought we had to accelerate in the emerging countries and in what we call the emerging businesses like Direct. What the numbers of 2012 reflect is that this acceleration is taking place. Emerging countries and the Direct business represent a growing share of AXA’s businesses, and this is boding well for the future because this is done with very solid margins in these businesses. Last but not least, on the selectivity side — because we wanted to be more selective in our capital allocation and in the geographies where we are operating — the numbers also show that this is working, because we are deemphasizing some businesses where the margins are lower and allocating less capital to some businesses where we thought we had too much. This is working. So, we are delivering, and this makes me very confident that we will continue to deliver on Ambition AXA.
EBM: What is your outlook for the future?
Henri de Castries: The outlook has to be built on three elements: the environment in general, the framework in which our business operates, and what we do, ourselves at AXA, to position ourselves in the competitive landscape. When I look at the environment in general, at this stage — and you always have to be cautious — what seems to happen is that emerging countries are in good shape. China is reaccelerating. The U.S. is really recovering, with employment getting better, with growth being probably in 2013 more favorable than in 2012. Europe is still struggling, and some countries in particular in Europe, so this remains a concern. But overall, the environment is progressively stabilizing which should be good for our business. If I look at the environment for our business — Property & Casualty, Life, Health & Protection, and Asset Management — this environment remains favorable in the long-term, because the world is getting richer, there is wealth creation everywhere, both in the mature and emerging countries. So this is going to mean for us more potential clients, more potential business. This is the favorable side of the environment. We, of course, have to remain cautious with the regulatory landscape where there are still some uncertainties. But overall, it should be fine. As far as what we are doing to position ourselves, as I said a few minutes ago, I think the efforts we are making to deliver on Ambition AXA, and also to prepare the future beyond Ambition AXA, in particular, for example, by investing more in the digital strategies which are going to transform the business, all this makes me feel confident for the future. Even if the recent years have made us learn that you have to be cautious, as an insurer should be.
EBM: Henri de Castries, Chairman and CEO of AXA, thank you very much.
Henri de Castries: Thank you.
