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French-based AXA, German Allianz, and Swiss-based Zurich have released their results this week, with each insurer reporting that 2023 was a successful year.
As with many of their competitors, the companies said their results in underwriting were helped significantly by high investment returns.
The good results were to be expected with larger companies outperforming small and mid-sized insurers and the insurers all having healthy investment portfolios.
AXA said it had had a successful delivery of its “Driving Progress” plan and was now undertaking a new strategic plan called “Unlock the Future”, which included key financial targets and a new capital management policy.
The P&C underlying earnings were up 73% to €5 billion (£4.28 billion), driven by a higher technical margin, higher financial result from investment income, and positive tax one-offs at AXA XL and Europe (€0.2 billion [£0.17 billion]).
"The Group reported €7.6 billion in underlying earnings, reflecting a strong operational performance in P&C, in particular at AXA XL.”
Gross written premiums (GWP) revenue was €48.05 billion, a 2% decrease. AXA XL saw a 22% drop in its GWP.
“In 2023, we continued to see good growth momentum in our core businesses including P&C, Protection, Capitallight G/A Savings and Health,” said Thomas Buberl, the organisation's Chief Executive Officer. “This was partly offset by lower volumes in AXA XL Reinsurance from a reduction in Property Catastrophe exposure, and in Health following our decision not to renew two legacy international Group contracts. The Group reported €7.6 billion in underlying earnings, reflecting a strong operational performance in P&C, in particular at AXA XL.”
For its asset management section, average assets under management decreased by 2% to €736 billion, reflecting unfavourable market effects.
Asset Management net flows amounted to €11 billion, with outflows from AXA Insurance companies falling €15 billion, and Asian joint ventures falling €5 billion. This was partly offset by inflows from third-party clients, an increase of €9 billion, both in AXA IM Core (up €5 billion) and in AXA IM Alts (up €4 billion). Asset Management revenues decreased by 2% to €1.6 billion, mainly driven by lower management fees, reflecting a lower average asset base.
“Underlying cost income ratio increased by 5.2 points to 71.6%, reflecting the impact of lower revenues and higher expenses reflecting a change in accounting treatment of variable compensation, partly offset by costs containment measures," it said. Asset Management underlying earnings were down 9%, to €0.4 billion.
AXA Investment Managers also released its annual results this week.
Zurich said it saw a record business operating profit for 2023.
“In the first year of Zurich’s 2023-2025 financial cycle, Zurich posted its highest ever business operating profit (BOP) of $7.4 billion, an increase of 21% in US dollar terms," it said.
This, they said, had been supported by the performance of the Commercial Insurance business, as well as a “record performance in our Life business, and growth at Farmers”.
The company also achieved its highest ever after-tax return on equity (BOPAT ROE) of 23.1%. Net income after tax attributable to shareholders (NIAS) increased 10% to $4.4 billion.
The P&C business operating profit (BOP) rose 7% in US dollars compared with the prior year period. “This was mainly driven by the increase in insurance revenue and an improvement in the investment result."
Zurich said its life business “delivered a very strong performance” over 2023, with a high BOP of $2.06 billion, 39% higher than in the prior year in US dollar terms, and an “all time high”.
In Q3 2023, Zurich said it saw its P&C insurance revenue grow to $31.4 billion for the nine months to 30 September, which was a 9% increase in the same period in 2022.
“We’ve achieved another year of record results, and all operating segments finished the year above or close to their operating profit target mid-points,” said Claire-Marie Coste-Lepoutre, Chief Financial Officer of Allianz SE, as the company released its preliminary results for 2023 on Friday.
“In our Property-Casualty business we recorded strong revenue growth, driven by pricing and higher volumes,” she added.
"Our investment result benefited from higher interest rates.”
Coste-Lepoutre said that the growth was spread across all of the group’s entities, which reflected the strength of the diversified business model. “Our focus on technical excellence helped us to mitigate the impact of inflation on our operating profit, which faced an above-average level of natural catastrophes. Our investment result benefited from higher interest rates.”
For the full year 2023, Allianz said its total business volume rose by 5.5%, to €161.7 billion, driven by the Property-Casualty business segment due to positive price and volume effects, and supported by the Life/Health business segment mainly as a result of strong growth in the US. “This was partially offset by lower revenues in the Asset Management business segment,” said the press release. “Internal growth, which adjusts for foreign currency translation and consolidation effects, was at 8%, primarily driven by the Property-Casualty and Life/Health business segments.”
For the P&C division, full-year operating profit rose 1.2% to €6.9 billion, driven by a higher operating investment result, which was partly offset by lower other operating and insurance service results.
This is an improvement on Q3 2023, where even though total business volume increased 4.5% to €36.5 billion for Q3 2023 and the company remained upbeat, there were slumps elsewhere for the Munich-based giant.
Nat CATs were blamed for a lower core net income of €2.06 billion compared to 2022’s same period seeing €2.91 billion, but this was seen as not affecting the group’s overall profitability. There was "a lot of good news”, said the representatives on the media results call.
For Q4 2023, total business volume rose by 7.8% to €39.6 billion, driven by all business segments. The increase in the Life/Health business segment was primarily driven by business in the US and Italy.
It said its 2024 operating profit target was set at €14.8 billion, plus or minus €1 billion.
The preliminary results gave no further investment results, which will likely be released with its full annual report for 2023 in early March.
