EuroBusiness Media (EBM): Axa Group is reporting 2014 results, Jacques de Vaucleroy welcome. You are the CEO of the Life & Savings business line AXA. In a challenging macro-economic environment with historically low interest rates, what has been the performance of the Life & Savings business line?
Jacques de Vaucleroy: I think that overall we can be pleased with our performance in this difficult environment, with growing revenues by more than 3%, at more than €55bn. This is a good result that we should be proud of, and at the same time we’ve been able to grow earnings significantly, because they are now above €3bn - I think it’s a 12 or 13% growth -, so this is I think a very good achievement taking into consideration the current environment.
EBM: Under the AXA Ambition plan, the Life & Savings business line underwent important transformations in the past years. To what extent are these results the translation of this new strategy?
Jacques de Vaucleroy: You know, very clearly our results are demonstrating that the strategy is paying. On the Savings side I’m very pleased to report that we have continued to improve our mix, Unit-linked (UL) are now representing a larger part of what we sell, General Accounts (GA) share is now below 40%, so this is clearly the continuation of the very strong progress that we have made in the past. Some good examples of new products launch - Relax Rente in Germany -, are very significant developments for us. I think it was a good time for us as AXA to demonstrate that GA was not the only solution, customers should be happy, the return of our hybrid or more UL solutions are clearly higher than the return they would have had in a GA product.
The progression on the Protection and Health side was also very good, it represents today 37% of the new business volumes, vs 31% 4 years ago, so clearly the progression is significant and is going in the right direction.
Overall, I have to say, New Business Value is also progressing well across the board, which is representing the concretization of all the efforts on the Saving side, on the Protection and Health, but also on growing revenues in the best geographies. And in that respect, we have been growing very nicely in Emerging Markets (+14%), so that’s also a very good satisfaction for 2014.
Another important development in our strategy is the launch of hubs. What are hubs? They are transversal capabilities that we are developing using the strengths of some countries and making them available for all geographies. So we have launched new hubs on the Health side, on the Individual Protection side, on the Employee Benefit side. And so this is helping us to bring capabilities to some places where we don’t have it locally, again, I think fueling the acceleration for the future.
EBM: In addition to a challenging environment, your industry is also facing many challenges. How are you tackling all these challenges?
Jacques de Vaucleroy: Yes, indeed we are facing an interesting challenge and, one could say, turbulent times. Life with a very large balance sheet is clearly exposed to this low interest rate environment, but not just that; this is a competitive market, you have traditional competitors but also new entrants coming in with agile structures and lower costs, so we need to remain also very agile. Focusing on these clearly tough times on the interest rate side, with these very very low rates, we have been really insisting on keeping a very strict ALM posture, protecting our balance sheet and making sure that we protect our very important investment margins.
The second thing we have done - and continue to do - in 2014, is the focus on In-force and the large book of reserves we are having. We are going back to our customers and proposing to look at the existing contracts, to potentially exchange their contract, to get out of their contract; there are sometimes clear, tangible benefits for them but also for us because we are reducing our exposure.
Lastlt, an important aspect of the work has been the focus on expense and cost. Low interest rates are increasing the pressure on cost reduction and making us more competitive. So it remains a very important effort, and on both In-force and costs, I’m happy to report that we are on track to deliver on Ambition Axa.
So overall I would say it was a very good year, and this is the reason why I want to really thank all our teams and all our employees for their very strong contribution again in 2014. I count on them for the future, because the future remains challenging, but I believe we have the resilience to go through these different difficult periods. The focus will remain the same in the future: selectivity of new businesses and at the same time growing in emerging markets, focus on In-force, focus on costs, focus on delivering more value to our customers.
EBM: Jacques de Vaucleroy, CEO of the Life & Savings business line AXA, thank you very much.
Jacques de Vaucleroy: Thank you.
