French insurer Axa’s net income surge in first quarter

On Monday, France’s Axa posted a 180% surge in its first quarter net income even as the French insurer rebounded from a spike in pandemic-related claims that led to a $1.8 billion (1.5 billion euro) charge in 2020.

In a statement Allianz, Europe’s second-largest insurer, reported around 4 billion euros of net profit in the first half, a near 100% increase from its 1.43 billion euros a year earlier.

Axa’s company-focused Axa XL unit, which was hit last year by business interruption and event cancellation claims, recorded 619 million euros in underlying income from an 843 million euros loss a year ago.

The turnaround in is evident in its first quarter results, said Axa’s CEO Thomas Buberl.

“Taking advantage of the continued favourable pricing momentum, Axa XL is well positioned to deliver its euro 1.2 billion earnings target in 2021”, said Buberl in a statement.

Axa’s underlying profit rose by a whopping 93% in the first half to 3.64 billion euros.

With the news reaching the market, Axa’s shares were up 3.29% topping France’s CAC 40 index.

“Axa’s results are a clear beat to consensus expectations, with Axa XL’s underlying earnings up +40% (ex-COVID) being a particularly pleasing source of strength”, wrote analysts at Jefferies in a note.

July’s devastating floods in Germany and Belgium is likely to cost around 400 million euros before tax and net of reinsurance in a preliminary estimate, said Axa.

In June, it reached a 300 million euro settlement with restaurant owners in France over pandemic-related insurance claims.

“The campaign is going very well on the ground”, said Axa’s Chief Financial Officer Alban de Mailly Nesle while adding, many restaurant owners had expressed interest in the settlement.

($1 = 0.8427 euros)

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