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Axa UK life and savings sales fall 20 per cent

Life and savings new business on an annual premium equivilent basis was down 11 per cent to £5.3bn over 2009 from £5.8bn the previous year.

Life and savings revenues were down 4 per cent to £49.9bn from £50.2bn the previous year.

The firm recorded a 20 per cent fall in new business in the UK over 2009 to £802m down from £1.1bn the previous year.

In line with other insurers, Axa’s corporate pensions sales were down 15 per cent to £287m. The firm says repositioning of the business away from initial commission as well as the impact of recession-driven recruitment, pay and contribution freezes on new member contributions were to blame.

Bluefin Advisory Services saw overall revenues decrease by a quarter to £70m in 2009, reflecting the strategic decision to dispose of the network businesses and to deliberately refocus towards fee based financial advice in readiness for Retail Distrbution Review, according to the firm.

Axa cites adverse market conditions for the overall drop, particularly a decline in individual investments & savings sales mainly in the US, Australia and the UK, product redesigns in the US which led to a drop in market share and a decrease in group life sales in Switzerland as a result of limited client turnover in the market.

But it says this was partly offset by a solid performance in France, with positive developments in both group and individual businesses, Italy and high growth markets such as Hong Kong.

Axa asset management inflows plunged 25 per cent to £2.6bn over 2009 from £3.4bn the previous year

Underlying earnings on the asset management side were down 41 per cent in 2009 to £307m mainly as a result of lower average assets under management.

Meanwhile underlying earnings for life and savings increased by 51 per cent to £2bn. The firm cites an improved variable annuity hedging margin.

Revenues on an IFRS basis for the UK plunges 22 per cent to £2.4bn over 2009 from £3bn. Life and savings revenues in the UK fell 12 per cent to £3.3bn.

The firm is proposing to shareholders a 38 per cent increase in dividend to 48p a share.

Chairman Henri de Castries says: “In what has been the most severe financial crisis in recent decades, Axa hasdemonstrated its capacity to deliver results by remaining focused on its core business, insurance and assetmanagement.

“These results confirm the strength of our business model, illustrated by the return of our solvency to pre-crisis levels and the strong rebound in our net income. Based on this solid performance, Axa’s Management Board will propose to shareholders a 38 per cent increase in dividend.

“In spite of uncertainties around the macro-economic context and taking into account the evolution of the regulatory framework, Axa should benefit from favorable trends in the insurance and asset management markets, its leadingbrand, innovative products and improving quality of service.

“The growth of the Group will be supported by the continued increase in exposure to emerging markets and the synergies generated by the new life and property & casualty global organization.

“Our 2010 priorities will also focus on optimizing margins in all business lines, through improvement of business mix in life, combined ratio in property & casualty, and net inflows in asset management.”

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