Axa: towards new trade-offs

The insurer would consider selling old life insurance portfolios in Germany. With the objective of freeing up capital and thus improving its solvency.

Axa is probably not finished with the arbitrations within its balance sheet.

The insurer led by Thomas Buberl would seek, according to the newspaper Handelsblattto sell a portfolio of 15 billion euros made up of old life insurance contracts.


Since he has been at the helm, the German boss of Axa has constantly repositioned the group towards the “technical” insurance businesses and freed it as much as possible from the “savings” business, much more depending on market weather and rates.

Through acquisitions (like XL Group) or disposals (like Equitable in the United States), Axa has repositioned itself in property and casualty insurance and health insurance, where financial success depends on the quality of risk selection. .

By separating from an old portfolio of life insurance contracts in extinction, that is to say closed to marketing, Axa seeks less to achieve a good financial operation than to relax its own balance sheet constraints. Because the old life insurance contracts are all the more expensive for an insurer as they are accompanied by guaranteed returns, sometimes very high (3% to 5%). Which is devastating for profitability in times of low interest rates.

Several buyers would be in the running with, according to the German daily, prices offered between zero and 500 million euros.

In the absence of gains on the sale, such a sale would above all allow the French group to free up capital, improve its own solvency and, de facto, facilitate the circulation of cash between the head office and its subsidiaries.

Enough to feed its war chest, which can be used either for targeted acquisitions or to improve the return to shareholders in the form of dividends or share buybacks. After the dividend of 1.54 euro to be paid this spring, the consensus of analysts expects a coupon of 1.65 euro next year.

Keep the Axa share [CS]. Target price: 29.50 euros.

Investment profile: dynamic.

Next meeting: general meeting on April 28.

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