AXA’s Tilt to Commercial Insurance and Technical Income Shows Nascent Positive Signs

AXA is a large European multiline insurer that has been on a path of renewed focus and transformation. While its renewed focus may still be a little elusive and it will always be hard for such a large insurer to achieve, given the nature of this business, the company has clearly made strong inroads in transforming its business model to one that is less focused on life and savings. Historically, these lines of business have contributed over half of AXA’s revenue and earnings. Yet, as the company took some deliberate actions to sell its North American savings business, shift its products to more technical-based income in Switzerland, and purchase a more North American-focused commercial property and casualty insurer with the proceeds, this is by and large a technical income-based, albeit large and diversified, insurance business. Alongside the developed markets of France, the U.S., and Northern Europe, we think the company holds solid property and casualty insurance businesses and relationships in developed as well as emerging markets in Asia.