Axa Sa Ord

Good morning, and thank you for joining AXA's nine-month 2025 Activity Indicators Call. Our Group CFO, Albon de Mainel, will walk through the highlights from the press release that we published last night, after which we'll be ready to take your questions. With that, I turn it over to Albon.

Thank you, Anou, and good morning to all of you. Thank you for joining the call today. So let me start with the key highlights on nine months 25. Overall, we delivered a solid performance with total revenues increasing by 7% to 89 billion euros. This reflects the strength of our franchise, which, as you know, is well diversified by line of business with 60% in P&C and 40% in life and health. And it's also balanced between B2B and B2C. All our geographies are delivering a consistent execution of our organic growth strategy, which is one of the key levers of our current plan. We continue to operate at a high level of capital with a sovereign city ratio at 222%. In the quarter, the group's financial strength was further affirmed by the decision from Moody's to upgrade its rating from AA3 to AA2. So let me now go through the key numbers of the release and I start with P&C. P&C revenues were up 5% to 46 billion euros, well balanced between the groups, three equally sized businesses, comprising of one large and specialty risks at AXA Excel, two small and medium sized risks in France, Europe and international markets, and three personal lines. At AXA Excel Insurance, premiums were up 4% to 13 billion euros. Prices were up 0.3% on renewables with the deceleration versus 1H25, predominantly in property pricing, which was down minus 4% in nine months versus minor 2% in 1H. This does not surprise us given the low level of industry NADCAT losses. In financial lines, we see the quantum of decline starting to flatten. And in casualty, pricing is plus 7% ahead of loss trends. So pricing in the majority of our business remains attractive, and we are growing with returns in excess of our cost of capital. In addition, our retention continues to be high. So based on what we see today and how we expect the market to evolve in the near term, We believe we can maintain AXA excels profitability in dollar terms in this plan with a number of levers. First, better investment income. We are still replacing lower yielding assets by higher yielding assets. Two, expense management. And three, given that we are a large net buyer of reinsurance, through more favorable reinsurance pricing. Our commercial lines XXL comprise of small and medium-sized risks, and you know that some of our competitors classify those as retail lines. In these lines, premiums were up 4% to 15 billion euros, with resilient pricing and good volume in France and international markets. And we expect margins to expand further as higher pricing is earned through. In personal lines, revenues were up 7% to 15 billion euros with good growth in both motor and non-motor. Our competitive positioning is strong. We saw close to a 1 million increase in net new contracts while we increased prices by 5%. So that will drive further margin improvement as it is earned through in the next month and year. So we have a good momentum in personal lines, both on pricing and on volumes. Finally, in reinsurance, revenues were up 8% to 2.4 billion euros, primarily driven by volume growth supported by alternative capital. Our reinsurance business is today well diversified with the majority of premiums from non-property lines. And partnering with Alternative Capital will help us better navigate the cycle and manage profitability. One last point on P&C. Our NatCat experience was below our prorated annual budget, in line with 1H level. And as a reminder, we managed NatCat together with PYD and discount benefit. Moving on to life and health. In short-term business, revenues were up 5% to 13 billion euros, reflecting disciplined pricing. In long-term business, revenues were up 11% to 29 billion euros, driven by strong performance in unit-linked, up 17% from successful sales initiatives across all geographies. Protection was up 11%, notably in Hong Kong, reflecting a commercial campaign, as well as in Switzerland and in Japan. And GA savings were up 6%, mainly driven by growth in France and in Italy. Next, on net flows. They were 5.6 billion euros positive year-to-date, compared to 0.9 billion euros last year, driven by the strong sales that I've just described and a decrease in surrenders. The improvement in net flows reflects the success of our initiatives to rejuvenate the life and savings business and will fuel our earnings growth over time. Moving on to new business. Life and health PVP was up 1% and NBV was down 1%. The NBV margin declined slightly to 4.5%. This results from strong sales in savings and protection with life PVP up 7%. But that was offset by discipline pricing and pruning measures in the multinational health and protection book, which is currently reported with AXA France Business. And overall, these measures delivered a 50 bps improvement in our health and PV margin. Life saw an unfavorable impact from actuarial changes implemented in the fourth quarter of 2024 in Japan. So I want to clarify two things. One, these changes that we made last year in Japan do not impact profitability in the short and medium term. And we can discuss that in the Q&A if you want. And adjusting for this change that we did last year New business CSM on a real like-for-like basis would have been up roughly 6% at nine months 2025. Moving to Solvency II. Our Solvency II ratio was at 222% at the end of September, up two points from the first half, mainly explained by three items. First, plus seven points from normalized capital generation, minus six points of accrued foreseeable dividends and annual share buybacks. Second, plus two points from the sale of AXA-IM, net of the full 3.8 billion euros of anti-dilutive share buyback currently being executed. But please note that we have taken the full impact of the share buyback, though only 63% was completed as of October 28th. And third, minus one point, from the negative impact of debt redemption executed in July. So we have disclosed some additional details in our press release on the impact of the end of the transitional period in Solvency II. On a pro forma basis, adjusting for the loss of eligibility of grandfather debt, you will see that our solvency ratio will still remain at strong levels. And from what we saw from the European Commission a couple of days ago, we are confident that the Solvency II revision, of which we will have the benefit in 2027, will lead to a significant increase in our solvency. Given the recent focus on French political risk, we have to clarify two things. One, our Solvency II ratio has zero sensitivity to the OAT spread widening. Two, on the topic of French politics, we have received many questions on the various budget amendments currently being discussed in the National Assembly. These discussions are similar to the ones we had last year. There is a long legislative process still ahead, and the final budget could look very different from what it may seem today. Last point on our balance sheet, given the recent credit events in the U.S. Overall, we have a high-quality investment portfolio reflecting disciplined asset allocation over the years. The vast majority is liquid fixed income invested in high-grade ratings. We have a balanced portfolio of alternative credit with strong safeguards. It comprises largely of residential mortgages, infra and agency debt with high rating, guarantees and low leverage. We have 8.8 billion euros of middle market lending book, which is highly diversified with an average ticket size of 8 million euros and screwed to non-cyclical industries. And we have private equity, a private equity book of 18 billion euros, also well diversified and focused on EBITDA positive companies. So thanks to our strict investment guideline, we have extremely limited or no exposure to credits which have been in the news recently. To conclude, so we believe we show very good numbers overall with continued growth momentum. This is driven by our diversified and balanced business model. We are executing on our plan with disciplined growth. And this gives us confidence to deliver 2025 UPS growth at the top end of our three-year plan target range of 6% to 8%. I'm now happy to take your questions.

Thank you, sir. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove your question, please press star and 2. The first question comes from David Barma of Bank of America.