AXA’s 7% Q1 Premium Surge Fuels Momentum Toward 2026 Targets

AXA, one of Europe’s largest insurance giants, has kicked off 2025 with a robust performance, reporting a 7% rise in gross written premiums and other revenues to €37 billion in Q1, outpacing analyst expectations of €36.3 billion. This growth, driven by strong contributions from property and casualty (P&C) and life/health segments, underscores the insurer’s progress toward its ambitious 2026 financial targets. With its “Unlock the Future” strategy now in full swing, AXA is positioning itself to deliver sustained earnings growth, disciplined capital returns, and resilience amid macroeconomic uncertainty.

A Multi-Faceted Q1 Win

The premium growth was broadly based, with P&C premiums climbing 7% to €21 billion and life/health premiums surging 8% to €15.5 billion. Even asset management, despite net outflows of €4 billion from a terminated low-margin mandate, grew 8% to €400 million. This diversification highlights AXA’s ability to generate momentum across its core businesses.

Notably, the insurer maintained its Solvency II ratio at 213%, a robust level despite a slight dip from 2024’s 216%, driven by currency headwinds (notably the U.S. dollar’s decline) and widening sovereign bond spreads. CFO Alban de Mailly Nesle emphasized that economic risks had not disrupted key metrics, citing reduced exposure to volatile sectors like U.S. motor insurance and tariff-sensitive geographies.

Strategic Targets in Focus

AXA’s 2024-2026 strategy hinges on three pillars:
1. Earnings Growth: A 6-8% CAGR in underlying EPS through 2026, up from the prior 3-7% target.
2. Profitability: A 14-16% ROE for 2024-2026, reflecting operational discipline and capital efficiency.
3. Cash Generation: Over €21 billion in cumulative organic cash upstream by 2026, enabling shareholder returns.

The Q1 results align closely with these goals. The premium growth directly supports EPS expansion, while the Solvency II ratio—though slightly below expectations—remains comfortably above the 100% regulatory minimum, ensuring flexibility for capital management.

Capital Returns: A Balanced Approach

AXA’s new capital policy aims for a 75% payout ratio of underlying EPS, split between dividends (60%) and share buybacks (15%). The dividend per share has already been raised 16% to €1.98 in 2023, with a guarantee of no cuts unless earnings or capital conditions deteriorate. The buyback program, excluding dilution-related transactions, signals confidence in the company’s cash flow.

Navigating Risks

While the insurer’s risk management has been exemplary—natural catastrophe claims for Q1 were just €0.1 billion, well below the annualized 4.5-point budget—the global economic backdrop remains fragile. Rising interest rates and geopolitical tensions could pressure underwriting margins or investment returns. However, AXA’s focus on predictable, low-risk segments—such as P&C commercial lines and employee benefits—reduces exposure to cyclical volatility.

Market Positioning: Scaling for Growth

AXA’s strategy prioritizes organic growth in high-margin areas:
- P&C Commercial: Targeting SMEs in key markets like the UK, Spain, and Italy.
- Retail Insurance: Leveraging agent networks and digital tools to deepen customer relationships.
- Healthcare: Expanding individual and workplace health offerings amid aging populations.

The insurer’s geographic diversification—with strong positions in Europe, Asia, and Canada—also mitigates regional risks.

Conclusion: A Resilient Path to 2026

AXA’s Q1 performance reinforces its capacity to achieve its 2026 targets. With 7% premium growth, a Solvency II ratio of 213%, and a robust capital return policy, the insurer is well-positioned to deliver on its 6-8% EPS CAGR and 14-16% ROE goals. While macroeconomic headwinds persist, AXA’s focus on disciplined underwriting, scalable businesses, and risk management creates a buffer for sustained growth.

Crucially, the insurer’s cash generation—projected to exceed €21 billion by 2026—provides a solid foundation for shareholder returns. For investors, AXA offers a blend of stability and growth, backed by a track record of executing strategic plans. As de Mailly Nesle noted, the insurer’s reduced exposure to volatile sectors and geographic risks positions it to “deliver on its targets even in a challenging environment.” With these fundamentals in place, AXA is primed to outperform peers and solidify its leadership in the global insurance sector.