French global insurer AXA has said that in Asia, protection and health products mainly drove the group’s growth in 2019, with total revenues up by 4% to EUR9.9bn ($10.7bn).
Strong and improving profitability levels were also reported, where property and casualty all-year combined ratio and health combined ratio both improved.
Total revenues in Asia were up driven by higher sales of Protection and Health products both in Hong Kong and Japan, partly offset by lower sales of General Account (G/A) Savings plans, the group said in a statement released last week.
Excluding Corporate-Owned Life insurance (COLI) products in Japan, annual premium equivalent (APE) in Asia grew by 11%.
In Asia, APE was up by 1%, mainly driven by higher Protection with Unit-Linked and Health sales in Japan, by China from higher New Year sales of G/A Savings products, and by Hong Kong from higher sales of Protection with Savings products. This was partly offset by a tax rule change impacting COLI products in Japan as well as lower G/A Savings sales in Hong Kong.
Strong and improving profitability levels
Property & Casualty all-year combined ratio improved by 0.1 point to 97.0%, as the improvement in claims experience, notably in Hong Kong and Thailand, was partly offset by higher expenses.
Health combined ratio improved by 2.0 points to 76.7%, mainly driven by an improved morbidity experience in Japan as well as a better claims experience in Hong Kong.
NBV margin increased by 0.6 point to 63.1%, mainly driven by Japan due to increased sales of higher margin Health and Protection with Unit-Linked products, partly offset by China from an unfavourable business mix reflecting higher New Year sales. New Business Value increased by 2% to EUR1bn.
Protection and Health driving earnings growth in the region
Underlying earnings were up by 3% to EUR1,204m, mainly driven by (i) increased sales in Protection and higher volumes combined with improved claims experience in Health in both Hong Kong and Japan, (ii) higher profit contribution from Thailand across all businesses, partly offset by (iii) investment in business development in China.
Mr Gordon Watson, CEO of AXA in Asia, said, “In 2019, we have been successfully pivoting towards Health and Protection while further developing our distribution capabilities. In China, we have completed the acquisition of AXA Tianping, becoming the largest 100% foreign-owned P&C insurer in the Chinese market. Our focus remains on meeting our customers’ needs to support them at every stage of their lives.”
Overall, AXA Group recorded another year of strong operational performance globally in 2019, where revenues were up 5% to EUR103.5bn, with growth across all lines of businesses and geographies. Underlying earnings rose by 4% to EUR6.5bn.
The Group achieved a significant milestone in 2019 in its strategy to shift its profile away from financial markets and towards technical risk, by fully exiting the US Life & Savings market and integrating the XL Group, and at the same time reducing its debt gearing ratio.