The following is a summary of the AXA SA (AXAHY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Despite a stable revenue increase of about 3% over seven years, AXA achieved a 34% increase in underlying earnings and a substantial 75% increase in organic cash.
AXA is moving into the future with an increased target for underlying earnings per share from the previous range of 3-7% to a new range of 6-8%. Similarly, the return on equity is estimated to increase from the previous 13-15% range to a new 14-16% range.
Cash remittance is projected to increase from €14 billion to €21 billion, 50% higher than the previous plan.
AXA aims to increase its underlying earnings per share by 6% to 8% annually through a focus on cash and capital generation, which is expected to see €21 billion of remittance for AXA SA over the next three years.
The company forecasts underlying earnings growth of 6% to 8%, with 2% coming from share buybacks and 4% to 6% from underlying earnings growth, despite factors like the reversal of discount benefits, increasing natural catastrophe load, peak prices at AXA XL, and the impact of the OECD tax reform.
Business Progress:
AXA SA reinforced its strong footprint in Japan through multiple distribution channels and aims to rejuvanate the CCI distribution.
The company targets lowering the average age of distributors and adjusting incentive structures, and leveraging technology to digitally empower physical distribution channels.
AXA's new plan, the Unlock the Future strategy, aims to drive higher organic growth and scale technical capabilities.
AXA sees potential in emerging markets, expecting them to contribute to 35% of its business by 2050.
Significant investment will be made in CAT business, where they are utilizing satellite imaging and geolocalization to reduce AXA's global CAT market share.
AXA is focusing on expanding its employee benefits for SMEs, developing further in the life insurance segment, increasing productivity, and offshoring more with the help of AI.
AXA UK Retail division plans to restore retail profitability through tighter expense management, and in the Employee Benefits division, the emphasis is on growth, particularly among SMEs, and on quicker, more precise renewal processes.
AXA France has increased the size of its distribution network and investments in technology, achieving strong growth in its digital franchise, Direct Assurance.
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