Axa Sa Ord

Good morning and thank you for standing by. Welcome to the AXA first quarter 2026 activity indicators call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star and 1 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Anu Venkataraman. Please go ahead.

Good morning and welcome to AXA's first quarter 2026 activity indicators call. Our group CFO, Albon de Mainel, will walk you through the highlights, after which we'll be happy to take your questions. Albon.

Thank you, Anu. Good morning to all. Thank you for joining the call today. So let me start with the key highlights. As you saw, we delivered a strong performance in the first quarter of 26. Total revenues increased by 6% to 38 billion euros, well balanced across lines of business and geographies. And our sovereign C2 ratio at 211% reflects the robustness of our balance sheet after the end of the grand trading period of January 1st. In the quarter, The group's financial strength was further affirmed by the decision from S&P to upgrade its ratings from AA- to AA. Let me now go through each line of business, highlighting what we expect for the year, starting with P&C. P&C revenues were up 4% with a healthy balance of volume growth and pricing in both commercial and personal lines. In personal lines, revenues were up 7%, reflecting continued strong momentum across all geographies. We have delivered strong volume growth from extending the customer base with 1.2 million net new contracts in retail, motor and household, particularly in France and Europe, in a favorable pricing environment with a 4% price effect over the period. And we expect pricing to remain conducive and continue to see good opportunities to grow. Commercial lines grew by 3%, with both higher volumes and positive price effect. At AXA Excel Insurance, revenues grew by 2%, driven by volumes. In Q1, the renewal mix is skewed toward international business, where pricing is holding up. On the overall book, pricing is stable versus last year. We continue to actively manage the cycle, growing in the lines where pricing meets our return hurdles. So we grew volumes in property with the business remaining at high profitability levels, despite increased pricing pressure with rates on renewals decreasing by 4%. In casualty, pricing on renewals was up 4%, and there we are focused on customer retention and on maintaining our overall exposure. Specialty lines also grew by 1%, with stable pricing at good profitability levels. In financial lines, renewal rates decreased by minus 2.5%, and we continued to be highly selective. So overall, pricing was stable in Q1. We believe we have room to grow AccelSales earnings in 2026 through a combination of selective top-line growth combined with lower insurance prices, notably in property, active expense management, and higher investment yields. In commercial lines XXL, revenues were up by 4%. This was driven by good price dynamic in Europe and in France, with overall pricing at plus 3%. We also delivered volume growth, particularly in France, While in the UK, market conditions are softer and we are disciplined on growth. Outside the UK, we expect the market to remain disciplined and to expand our margins as pricing is earned through. And finally, in reinsurance, revenues were down by 7%. Renewal pricing was down 3%, a good outcome in the current market. And we remain disciplined and therefore we have reduced volumes. On NatCat market, Group net-cat experience in the first quarter was slightly better than the prorated annual cat budget, with benign experience at AXA XL and despite losses in France from both Storm Nils and Goretti of €0.1 billion overall. It's only the first quarter, so we maintain our annual net-cat budget of 4.5 points of combined ratio for the year. finally let me just say a word on inflation so we closely monitor it obviously and you know that most of our pnc contracts are annually renewable but that gives us the ability to adjust pricing based on market conditions in commercial lines xxl significant portion of our premiums have some direct or indirect indexation to inflation and pricing conditions remain favorable in excel In casualty and to a lesser extent in financial lines, social inflation is decoupled from general inflation. And therefore, the book that is mainly impacted by inflation is property, which represents less than 30% of the business and where underlying assets are revalued every year. And in retail, as you saw, pricing conditions remain favorable. I would also add that the context is much better than in 2022. At that time, inflation had started before the Ukraine war and was compounded by it. So inflation will be impacted if the war in Iran lasts, but the impact is not immediate. So in summary, in PNC overall, with these Q1 results, we're confident in our ability to deliver top line growth and margin improvement over the year. Now moving to life and health. In life and health, premiums were up 8% to 16.5 billion euros, driven by strong performance. In the long-term business, premiums grew 9%, reflecting strong sales momentum across unit-linked, general account, and protection. In short-term protection and health, revenues were up 6%, mainly driven by favorable price effects in health across geographies, as well as expansion in margins, including from the progressive recovery in Mexico, reflecting the actions we took to offset the VAT change. We had strong net flows at 2.7 billion euros. This is 2.5 in Q125. And as you know, that will fuel growth in CSM and earnings over time. And we, like in PNC, remain confident in our ability to maintain this momentum. New business. So we grew new business CSM by 4% and notably more than 5% in life. This growth was driven by strong volumes in savings and protection with an 8% increase in PVP and good margins. NBV was up 1% due to lower sales and adverse mix in our JVs in Thailand and China of setting the growth in new business CSM. Moving on to Solvency II. So we continue to operate at the high Solvency II ratio that stands at 211% at the end of March. As you know, on January 1st, our Solvency ratio was 215% following the end of the grandfathering period that represented a minus 10 points impact versus December 31st, 2025. On top of this impact, Our ratio was down four points in the first quarter of the year, plus seven points from normalized capital generation, minus six points of the accrued foreseeable dividends and annual share buyback, and also minus four points from unfavorable impacts from financial markets, reflecting notably higher inflation expectations and increased volatility of both equity and interest rates. And I remind you that we estimated the sovereignty to revision benefit at 17 points increase in our sovereignty to ratio and that will come into effect next year. Before moving to the Q&A, so let me conclude. On how access position in the current environment. We are off to a strong start this year, consistent with our ambition. We deliver strong growth in a conducive pricing environment in retail and commercial XXL P&C. We captured growth opportunities at XXL in lines where our return hurdles are met, and we have a very strong momentum in life and health. That's to benefit of our diversified business model, because across lines of business and geographies, this model is built to deliver predictable earnings growth. And in the current volatile environment, we have a strong balance sheet with a solid 211% solvency to ratio, prudent reserving, and a disciplined asset allocation with high quality assets and a low exposure to below investment grade private credit, on which we gave additional disclosure in our 2025 full year results presentation. And the strength of our balance sheet, as I said at the beginning, was recently reaffirmed by SNP's decision to upgrade our ratings from AA- to AA. So all of this gives us confidence to deliver our 2026 UEPF growth at the top end of our target range of 6% to 8% and to sustain growth beyond 2026. I'm now happy to answer your questions.