Axa GI and Healthcare Earnings Dip

Global insurance group Axa has seen earnings drop for its UK and Ireland healthcare and general insurance divisions. Earnings fell by 18 per cent from £77 million in 2008 to £63 million in the first six months of 2010 – a decrease Axa claims is due to higher reinsurance costs, a lower investment return and the severe weather in January.

With 65 years experience of selling private medical insurance, it would be a surprise if the 18 per cent decline prompted any major change in Axa’s strategy, but can instead be seen as a reflection of the difficulty facing the health insurance market.

Axa remain confident about the second half of 2010, citing a 7 per cent increase in earnings in their commercial motor division and improved underwriting returns after implementing rate increases as evidence of their continued strength. Indeed, the motor insurance division was one of Axa’s best performers, with a 37 per cent increase in the number of car insurance policies. Furthermore, revenues in their general insurance business actually rose by 1 per cent to £1,708 million.