Axa announces share buyback plan, posts higher profit

(Reuters) — French insurer Axa announced a new share buyback program as it posted a 3% rise in first-half net profit, driving up its stock price.

Axa, Europe’s second-biggest insurer, behind Germany’s Allianz, said it would buy back up to €1 billion ($1 billion) worth of its shares, echoing a similar buyback plan unveiled by rival Generali this week. 

The buyback pleased analysts and caused Axa’s shares to jump up by around 5% in early session trading.

“We find ourselves pleasantly surprised today, not only by the launch of a new buyback, but by its size, as €1 billion is substantially larger than the €0.7 billion cash benefit Axa received by restructuring the holding company,” wrote brokerage Jefferies, as it kept a ‘buy’ rating on Axa.

Axa’s first-half profits rose thanks to higher revenue from areas such as health insurance, which outweighed the financial impact of the war in Ukraine.

Axa earned €4.1 billion up from €3.99 billion in the year-earlier period.

The global insurance industry faces hefty claims as a result of Russia’s invasion of Ukraine, but Axa expressed confidence in meeting its 2023 strategic growth targets.

“We are very confident in our ability to reach the big targets of our ‘driving progress 2023’ strategic plans,” said deputy CEO Frédéric de Courtois.