AXA NZ insurance earnings fall by a fifth
AXA Asia Pacific Holdings' New Zealand 2009 operating earnings were down 18% to $35.1 million with insurance falling by nearly a fifth, the company reported yesterday.
Thursday, February 18th 2010, 4:56PM
by Jenha White
AXA's insurance earnings were down 19% to $25.6 million from $31.7 million in 2008.
Ralph Stewart, AXA New Zealand's chief executive, says the global financial crisis (GFC) and the economic recession affected insurance with existing group business scheme members not increasing their benefits last year.
"This is significant for AXA because we have the largest group market share of just over 30% and members changing their insurance benefits has a big impact."
He says lower profit margins in long term risk because of poor investment experience in 2008 with the GFC and some unfavourable claims experience in individual income protection also contributed to the decrease in operating earnings.
Stewart says there was no clear trend in any particular areas as to why there was a higher amount of claims, but those figures can move around from year to year.
Overall AXA's in force premiums for new business were static at $28.2 million and the level of discontinued policies fell slightly from $24.8 million last year to $21.8 million. Its in force premiums at December 31 were up 4% to $182 million at the end of the year.
During the year AXA managed to increase the level of risk product sales through its non-aligned channels compared to AXA-aligned agents.
Sales through non-aligned advisers was up 17.5% to $4.7 million while AXA-aligned adviser sales fell from $7.4 million to $6.6 million.
One of the main changes of the year for AXA was a revised commission structure for insurance with a focus on linking increased upfront commissions to policyholder persistency, having the dual objective of growing new business and reducing discontinuancies.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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