EuroBusiness Media (EBM): Axa Group reports 2014 results, Jean-Laurent Granier welcome.You are the Chairman & CEO of the P&C business line. 2014 has been challenging, the environment has been challenging for AXA, for the whole Group and the P&C business line. What are your comments on the 2014 results.
Jean-Laurent Granier: 2014 has been a good year for AXA in P&C despite a challenging economic environment and higher natural catastrophies claims experience. We have increased our revenues by 1.5% reaching €29.5bn euros, and this in a context of economic slowdown. And we have increased our underlying earnings by 2.3% reaching €2.2bn, and this in spite of a higher impact of natural events, such as the ELA hail storm in Europe, affecting France, Belgium and Germany, or the Odile Hurricane we have suffered in Mexico.
EBM: Could you give us details by geographical zones? What has been driving your growth?
Jean-Laurent Granier: Getting into more detail, the growth in the major countries has been limited to 1% due to quite a depressed economic environment and some early signs of a softening market affecting notably Commercial Lines. In Direct we have delivered a good performance growing by 5% our revenues, notably in the UK, France or Japan.
In the High Growth Markets, Asia delivers a solid growth with a 7% increase of the revenues. And if some of the geographies have slowed down, such as Turkey for instance affected by a very severe drop in car sales, or in Mexico where we had some pruning activities, we can also note that our latest acquisitions have delivered a very good growth, for instance AXA P&C in China (Tian Ping) has grown by 19% last year, and AXA/Colpatria in Colombia has delivered a nice 14% growth. So overall quite an interesting picture in the High Growth Markets.
We have been sticking to our pricing and underwriting discipline, delivering more pricing sophistication and having a more selective activity in underwriting and some pruning activities. Overall this has allowed us to deliver an improving current year Combined Ratio at 97,6% despite an important impact of the natural catastrophies this year which was more than 1 point higher than the year before. Overall and putting aside these exceptional natural catastrophies’ impact, our Current Year Loss Ratio in a normalized way has improved by more than 1 point.
We have been at the same time sticking to our discipline, increasing pricing sophistication, doing selective underwriting and having some pruning activities in order to guarantee our profitable growth for the future. In that context we have brought down our Current Year Combined Ratio further: we end up at 97.6% and this despite the high impact this year of the natural events which was more than 1 point higher than the impact we had last year. And we can notice that in a normalized way, i.e. putting aside the impact of these exceptional natural events, we would have improved our Current Year Loss Ratio by more than 1 point.
Our whole Year Combined Ratio now stands at 96.9%, which gives us full confidence that we are well aligned to deliver on our Ambition AXA target which is to bring it below 96% by the end of 2015.
EBM: Can you give us an update on the implementation of the overall strategy for P&C?
Jean-Laurent Granier: Yes, transforming our business is for us one of our top priorities. We want to become more digital and to be able to take into account this new environment, to increase the frequency of contact with our customers and to have a better accessibility for them. So we have developped a lot of multi-access intiatives, we have launched several multi-access products, notably in Motor. And we also had a leveraging technology deliver some innovative offers such as telematic for young drivers, or leveraging Big Data opportunities, inventing new products such as the agriculture parametric insurance products.
We are also keeping on reshaping our business with a stronger focus on Commercial Lines which now represent 41% of our P&C revenues, compared to 38% in 2010. And we are increasing our exposure to the Direct business and the High Growth business. Today, Direct and High Growth Markets account for 15% of our total earnings compared to only 9% in 2010.
And we are keeping on expending our footprint, for instance in the High Growth Market we have invested in Nigeria, which is the most promising and fast-growing economy in Africa, acquiring Mansard insurance, which is the #4 insurer in Nigeria but a very fast growing one.
Also, we concluded a partnership in bank insurance with mBank, in Poland, which is a top-notch digital bank which is been awarded for that in 2014 in Europe. For the rest of the activities, whilst integrating the latest acquisitions we did the year before in China with Axa/Tian Ping or in Colombia with Axa/Colpatria, we are also developing a new Greenfield in Brazil dedicated to Commercial Lines, and we are studying the launch of a Greenfield in Egypt.
So in a nutshell, 2014 has been a good year for the P&C activities at AXA. We are confident that we are on the right track to deliver on our Ambition Axa target by the end of 2015. I would like really to thank very much all the P&C teams of the Group, for their efforts and commitment. And I think that thanks to them, we are well prepared for the future.
EBM: Jean-Laurent Granier, Chairman & CEO of the P&C business line AXA, thank you very much.
Jean-Laurent Granier: Thank you.
