Axa profit beats forecasts, avoids worst of Los Angeles fire claims

(Reuters) — French insurer Axa Thursday reported better-than-expected full-year earnings, boosted by increased premiums, fewer claims and increased margins for its natural catastrophe coverage.

Europe’s third-biggest insurer by market capitalization said it expected its results this year would see a pre-tax impact of about €100 million ($104.3 million) from the Los Angeles wildfires, among the lowest in the industry for claims.

CEO Thomas Buberl reaffirmed the insurer’s commitment to covering natural disasters, following criticism from some over a sharp decline in exposure at Axa XL’s reinsurance unit.

“We’re going to stay involved in natural disasters because it’s a risk that we absolutely have to take for our customers, in a very diversified way, which means we have to choose our exposures carefully,” Mr. Buberl said, calling for more prevention.

Axa XL Re saw a 60% drop in natural disasters’ exposure over two years. Such exposure is falling across the industry as insurers, rather than reinsurers, pick up more business.

The Los Angeles wildfires in January, which killed more than two dozen people and damaged or destroyed nearly 16,000 structures, are set to become the costliest in U.S. history, with analytics company CoreLogic estimating related insurance claims of $35 billion to $45 billion.

Axa’s full-year net income jumped by 10% from 2023 to €7.89 billion ($8.28 billion), beating an average forecast of €7.75 billion by 19 analysts in a company-compiled poll.

Underlying earnings climbed 6%, while total revenue rose 7% to €110.3 billion.

Axa’s property/casualty division, which accounts for more than half its total revenues, posted an all-year combined ratio of 91%.