Axa Sa Ord

Good morning to all of you, and thank you for joining the call today. So let me go through the key highlights of 1Q24. And I think the sentence that said it all is that we have achieved a very good performance in this first quarter. We delivered strong organic growth across all our lines of business, P&C, life and savings, health, and asset management. And this is obviously very consistent with our new strategic plan, which we presented to you in February. So we are growing all our businesses, leveraging our attractive positioning, in particular in PNC commercial lines and employee benefits, and our growth initiatives are starting to contribute. Overall, our total revenues increased by 6% to 34 billion euros. Our balance sheet remained very robust. with a solvency to ratio at 229%, reflecting our strong capital generation capacity. And we also continue our actions on climate. We have recently strengthened the access for progress index targets across underwriting, investment, and our own operations. But let me now go through the key numbers of the press release, starting with PNC. PNC revenues are up 7%, with growth both in commercial and personal lines. In commercial lines, excluding AXA Excel Re, we grew by 7%, and this was driven by favorable price effects across all markets, as well as higher volumes, notably in Europe and at AXA Excel. At AXA Excel Insurance in particular, prices were up 3% on renewables, which is a similar growth as last year's, so pricing is holding well. Excluding North America professional lines, pricing, including exposure, is slightly above loss trend. And as explained in February, there are different dynamics and we are managing the cycle proactively. We see a continued hard market in short tail lines, notably North America property, up 15%, while pricing is moderating in long-tail lines, with plus 5% in casualty, but this remains above loss trends. In North America professional lines, pricing remains soft, and we remain focused on profitability. In France and Europe, still in commercial lines, we continue to see favorable pricing at plus 4%, and plus 3% respectively. And we also continue to see good demand from corporates across SMEs, mid-markets, and large risks, and this is driving growth in volumes. So we are well positioned to capture the structural growth in this market, including through our growth initiatives in white spaces, mid-markets, and new risks. In personal lines, revenues were up 6% with growth both in motor and non-motor, up 3% and 9% respectively. Pricing was very strong overall at plus 10% across both motor and non-motor. In motor, pricing continues to accelerate across geographies, notably in France and Europe, except for Switzerland. And this was partly offset by lower volumes and the change in business mix in the UK, where we did, for the reasons you know, a full portfolio review, and we further strengthened our risk selection in addition to significant pricing actions. Overall, in personal lines, both frequency and severity are in line with our expectations in the first quarter. And therefore, we are confident in our margin improvement plan, which is, as you know, an important part of our 200 bps target for the improvement of our combined ratio in the plan. Finally, in reinsurance, as you know, the right sizing of property catlines were completed in 23. And so in 1Q24, the revenues were up 9%. driven by both favorable price effects in property and casualty and higher volumes in specialty. One last point on NatCat and large losses. Group NatCat experience in the first quarter was below its prorated annual budget, but we maintain our annual NatCat budget of 4.5 points of combined ratio for the year. And as for the large losses, we expect the potential impact from the Baltimore Bridge to be non-material at group level, i.e. less than $100 million before tax. Now moving to life and health. In life, premiums were up 6%, with very strong growth in capitalized GA savings with 19%, plus 19%, notably in Japan from 2008, strong sales of single premium whole life products, and in Italy, from the successful launch of a new product. We had also strong performance in unit linked, plus 8%, driven by successful commercial campaigns across our distribution network, and mainly in Italy and in France. We also saw a positive trend in protection, up 3%, notably from higher sales in protection with unit linked in Japan and in Europe, mostly from Switzerland. And lastly, in line with our strategy, premiums in traditional GA savings were down 14%. In health, premiums increased by 7% to 4.8 billion euros, primarily driven by favorable price effects, both in group and individual businesses, across our main geographies. In the UK, we continue to take pricing actions which will be earned over time, but we are also, very importantly, rigorously implementing the claims pathways to triage claims in order to manage our claims cost. That's, as you know, a very important aspect of our plan to improve profitability in our UK health business. On the net flows, so we saw strong flows both in protections and health, and that was particularly, partly, sorry, offset by continued outflows in traditional GF savings across most geographies in line with our strategy. In aggregate, our surrender ratio remains broadly stable versus full year 23 and improved versus 1Q23. Moving on to new business, life and health, PVEP and NBV were up 14% and 6% respectively, and this was attributable to the favorable impact of lower interest rates and good volume growth, as I just mentioned. New business CSUP was up by 1%, impacted by the model changes that we implemented in full year 23. So as you know, we update assumptions only at 1H and full year. At full year 23, we updated assumptions in France, which had an unfavorable effect on the new business CSM. And this effect impacts 1Q numbers, 1Q24 numbers, but not the 1Q23 that we reported. Therefore, the two periods are not directly comparable. NBV margin was down 0.4 point, and that reflects the unfavorable impact of lower interest rates and the effect of the model changes I've just mentioned. And overall, our business mix in life and health remains of high quality. One word on enforced management. As you've seen, the German transaction will not go through. There's been a significant change in market condition since the deal was announced, and that has caused both parties, Soraya and us, to reconsider their position. We have taken advantage of higher interest rates to close the duration gap, and there is now more value to the book today for us. The fact that we have terminated the transaction will have no impact on the targets disclosed by the group as part of its new strategic plan, Unlock the Future. But you also saw that we announced today, or yesterday rather, that Axelife Europe entered into a reinsurance agreement with Nuri, a subsidiary of Munich Re Group, which will cover around 3 billion euros of variable annuity reserves. This transaction is expected to result in a reduction of underlying earnings of around 20 million euros per annum from 2024 onwards. But as you saw in the press release, this will be compensated, earnings per share wise, by a 200 million share buyback. Finally, in asset management, Average assets under management increased by 2%, reflecting both favorable market effects and positive net flows. Net flows amounted to 6 billion euros. We had strong inflows from third-party clients in both our core and our alt platforms, and more particularly in real estate, which reflects XIM's superior performance track record in this asset class. Revenues were up 3%, mainly driven by higher management fees due to an increase in average assets under management. Last word on Solvency II. So we continue to operate with a strong Solvency II ratio at 229% at the end of March, up two points versus full year 23. So that comes from plus seven points from normalized capital generation, minus five points of accrued foreseeable dividends and annual share buybacks, plus one point from subdebt reflecting the issuance of 1.5 billion euro restricted tier one in January, but partly offset by the repurchase of around 1.2 billion euros of subdebt through a tender offer. And as you know, we intend to maintain our stock of debt stable over the plan, minus three points from expected regulatory changes, and plus two points from financial markets, mainly higher equity markets. So we're happy with our strong sovereignty ratio that reflects our capital efficient business model. So to conclude, We are off to a very strong start this year, and that's very consistent with our plan. And therefore, we remain confident in our strategy. We are very focused on the execution and the delivery of the new strategic plan targets. And that's all supported by the attractive and highly diversified business model, which allows to deliver predictable earnings growth. I'm now happy to take your questions.

Thank you, sir. As a reminder, to ask a question, you will need to press star and one on your telephone and wait for your name to be announced. To withdraw your question, please press star and two. The first question comes from Will Hardcastle of UBS.

Oh, hi. Thanks for letting me take the first question. It's only one, actually. to do with, if I look at the pricing, the premium, it looks like there's been volume reductions throughout the personal lines book, motor particularly. UK is enormous at a 50% price and 2% premium. You mentioned the mix shift there, Alban. I guess, is there any way that we can get an indication of how much the UK motor volume has reduced? Because obviously, we'd be looking in excess of 40%, but I assume that's not right. That would be really helpful. Thank you.