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AXA profit surges 60%
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September 30, 1999: 1:39 p.m. ET
French insurer gets big boost from GRE buyout, Asian rebound
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LONDON (CNNfn) - French insurer AXA, the leading European industry player, posted a 60 percent jump in first-half earnings Thursday, boosted by strong showings in its global insurance operations, a rebound in the Asia-Pacific region and one-time benefits from a big acquisition.
First-half net income at AXA (PCS) jumped a stronger-than-expected 59.5 percent to 1.469 billion euros ($1.55 billion). AXA stock gained almost 4 percent to close at 118.8 euros in Paris.
All the company's principal sectors -- life insurance, property and casualty insurance, reinsurance and financial services -- had modest to strong gains as AXA continued to pursue a strategy of acquisitive global expansion.
Excluding one-time items, AXA's net income rose 26.7 percent from a year ago to 1.167 billion euros. Per-share earnings on a fully diluted basis climbed 19.5 percent to 3.31 euros.
The first-half figures include a one-time gain of 302 million euros from AXA's integration of Guardian Royal Exchange, which was bought by AXA unit Sun Life & Provincial (SLP) in February.
In August, Sun Life, in turn, sold the life insurance business of GRE to the Netherlands' number-two insurer, Aegon, for $1.13 billion.
The GRE gain offset a drop in some of AXA's European life insurance markets, although profits for the insurance unit as a whole edged higher in the first six months to 595 million euros.
The weakness was offset by improved business in the Asia-Pacific region. The operation bounced back into the black, contributing 39 million euros, compared with a loss of 21 million a year earlier, as the region emerged from its financial turmoil.
Andrew Ritchie, analyst at Fox-Pitt Kelton in London, singled out the insurer's U.S. operations, which he said had made a "solid contribution."
He cited the U.S. unit, Axa Financial, which controls life insurer Equitable and investment bank Donaldson Lufkin and Jenrette, as "one of the key drivers of value for the group."
Ritchie expects the insurer to pursue its opportunistic acquisition strategy as its operations continue to generate surplus capital. Axa remains particularly weak in southern Europe and Japan.
Axa is Europe's No. 1 insurer, with $655 billion in assets under management last year, ahead of Germany's Allianz (FALV), with $361.1 billion. Axa ranks in the top 5 of 12 life and non-life insurance markets worldwide, according to Fox-Pitt Kelton.
Assets under management at the end of June were 684.4 billion euros, up 22.3 percent from a year earlier.
Financial service contributions rose 24 percent to 187 million euros, while profit from property and casualty activities leapt 80 percent to 349 million euros. 
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