Earnings call: AXA outlines strategic "Unlock the Future" plan for growth

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Earnings call: AXA outlines strategic "Unlock the Future" plan for growth
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AXA Group (AXA) has unveiled its strategic plan for 2024-2026, "Unlock the Future," aiming to drive organic growth, enhance technical capabilities, and improve operational efficiency. During the earnings call, the company discussed its focus on scaling technical capabilities through AI and data, expanding in growth areas, and increasing productivity.

AXA plans to return 25% of the market cap to shareholders, retain 25% of earnings for growth, and aims for a 5% annual growth rate in the top line over the next three years. The company also addressed challenges in the health business, plans for the SME market, and strategies for improving margins in various sectors.

Key Takeaways

  • AXA's new strategy plan targets higher organic growth, technical scaling, and operational excellence.
  • The company will focus on climate adaptation and inclusive insurance.
  • Financial targets include increasing underlying earnings per share, return on equity, and higher cash remittance.
  • AXA plans to return 25% of the market cap to shareholders and retain 25% of earnings for organic growth.
  • The growth rate target is around 5% per year in the top line, with improved margins.
  • AXA aims to scale up data and AI projects and decrease the non-commission expense ratio.

Company Outlook

  • AXA aims for underlying earnings per share growth of 6% to 8% annually.
  • The company expects a return on equity of 14% to 16% and a payout ratio of 75%.
  • Plans include increasing productivity by 10% over the next three years using AI.
  • The strategy focuses on expanding in areas with growth potential, such as the SME market for employee benefits.

Bearish Highlights

  • AXA acknowledged profitability challenges in the health business due to COVID, international reinsurance, and the Health UK business.
  • The company cited headwinds like the unwind of the discount benefit, increased Nat Cat load, declining interest rates, and OECD tax reform.

Bullish Highlights

  • The company expressed confidence in achieving targets, citing good internal governance and a strong management team.
  • AXA plans to grow underlying earnings in P&C by 4-6% and in Life and Health by 4-6%.
  • Asset Management anticipates 7% annual earnings growth.
  • The company expects to generate €25-30 billion in capital over the next three years, with €17 billion returned to shareholders.


  • There was no specific earnings forecast provided for 2024.
  • Concerns were raised about personal lines margins and XL Insurance profitability.

Q&A Highlights

  • Executives discussed measures to improve personal lines margins in Retail UK and Retail Germany.
  • They assured that XL Insurance is being managed through cycle management practices.
  • Questions on technology and asset management were suggested for future discussions.

AXA's strategic plan "Unlock the Future" sets ambitious targets for the company's growth, focusing on leveraging technology and data to improve efficiency and profitability. The company remains committed to delivering value to shareholders while navigating market challenges and capitalizing on opportunities in emerging markets and the SME sector. With a strong emphasis on execution and capital management, AXA is positioning itself to be a best-in-class insurer in the years to come.

InvestingPro Insights

As AXA Group (AXA) gears up to "Unlock the Future" with its strategic plan, the company's financial health and market performance provide critical context for investors. According to InvestingPro data, AXA currently boasts a robust market capitalization of $77.0 billion USD, reflecting its substantial presence in the insurance industry. This is complemented by a Price/Earnings (P/E) ratio of 11.25, which adjusts to 10.89 when looking at the last twelve months as of Q2 2023, suggesting a potentially attractive valuation relative to earnings.

InvestingPro Tips highlight that AXA has a history of shareholder returns, having raised its dividend for 4 consecutive years and maintained dividend payments for 45 consecutive years. This consistent performance is a testament to the company’s commitment to its shareholders, which aligns with the strategic plan's emphasis on returning value to investors. Additionally, the stock is currently trading near its 52-week high, indicating strong market confidence which could be a positive sign for those looking to invest in a stable company with growth potential.

Investors seeking more in-depth analysis and additional InvestingPro Tips can explore further insights on https://www.investing.com/pro/AXAHY. There are 9 more tips available on InvestingPro, which could provide a more nuanced understanding of AXA's position and prospects. To access these insights and take advantage of a comprehensive investment tool, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

AXA's strategic initiatives, alongside its financial metrics and market performance, suggest a company that is not only looking to the future but also building on a foundation of stability and growth.

Full transcript - AXA PK (AXAHY) Q4 2023:

Anu Venkataraman: Good afternoon, and welcome to AXA's Presentation of its New Strategy Plan for 2024 through 2026. A special welcome to those who are here in-person, who have braved the bad weather outside. Thank you. And thank you also for those joining us on the webcast. Presenting today will be our Group CEO, Thomas Buberl; Group Deputy CEO, Frédéric de Courtois; and our Group CFO, Alban de Mailly Nesle. For Q&A, they'll be joined by other members of our management team. So they won't necessarily stand up now, but they'll – you'll see them later. So we have Patrick Cohen, who's CEO of Europe for AXA; Guillaume Borie, who's CEO of AXA France; Scott Gunter, who's CEO of AXA XL; Hassan El-Shabrawishi, who is CEO of our International Markets. We also have George Stansfield, who's Deputy CEO. As you know from last year, Hong Kong and Japan report to George. We also have Alexander Vollert, who's our Group COO. So with that, I turn to – oh and AXA – I am – AXA Investment Managers, Marco Morelli. I'm so sorry, Marco. So with that, I turn over to Thomas.

Thomas Buberl: Thank you, Anu, and good afternoon to all of you. Very happy to be with you in this room. And first, what I would like to do before we look forward and unlock the future, let's quickly look backward again, what has happened over the last seven years. Because as you well know, because you have accompanied the journey of transformation, what is called AXA today is very different to what AXA was seven years ago. What is AXA today? AXA is a company that is much simpler, with a much more focused footprint, a company that is focused towards technical risk, coming very much from market risk and financial risk, and certainly focused on cash generation. What we see over that period is that revenues have roughly been stable, plus 3%, however, underlying earnings have progressed by 34%, and organic cash has progressed by 75%. So the business today is a high quality business that generates sustainable earnings, but in particular has a very high cash conversion. The business is a distinctive franchise and certainly very balanced. As a result of this transformation and the simplification, it's a business that relies 50% on commercial insurance, 50% on retail insurance, and within we have focused ourselves on fewer positions, fewer geographies, but with leading positions. So if you look on the commercial insurance, which is 50%, we are today the largest global underwriter of corporate risks, both for physical risks, buildings, the production plants, but also for the human assets of companies. Or when we look into the 50% retail insurance, we see that we are almost everywhere top three in Europe with a very strong agent distribution and a multi-line approach, but we are also strong in Japan, Hong Kong, and in 15 emerging markets, where we are amongst the top five. As I said earlier, this business is very focused on high return on equity and high cash generation, but what is very distinctive and particular about it, that we are very close to our customers. Having predominantly agent distribution and having it very decentralized means being close to our customers, and that is also one of the reasons why our net promoter score has been increasing over the last year. So it's a very distinctive franchise if you look at what else is around in the market. When we look back for the last time, into the existing plan that comes to the end, Driving Progress 2023, we can clearly say that it has happened in a challenging environment, because I remember when we launched this plan three years ago, we were alone in the room, we had masks on because it was in the middle of COVID. And since then we have seen plenty of crisis, and one can clearly say that our model, that I described earlier, has been tested and validated because it has delivered a very strong and consistent performance in this very challenging environment. When we look at the four objectives we have set ourselves, we can clearly say that we have met one and exceeded three of them, which I think is a very good result and wasn't so obvious at the beginning of this plan. When we look in particular what we have achieved in terms of shareholder return, we have returned roughly €13 billion in dividend and share buyback, which if you go back to the market's cap of at the beginning of this plan represents roughly 30%. So this strong delivery is a consequence of the very deliberate strategic choice that we have made in order to shape the business as a business that is become far – has become far more reliable, far more consistent, but certainly a big generator of cash. Looking forward now, we come out of an uncertain environment and we believe that the macro environment going forward will remain very similar to what we have seen in the last plan. And this is why it's important to have a company that is well diversified and well balanced. And we've seen over the last plan that the group has proven to be solid in this difficult environment and prudence and diversification were absolutely key for that. If you look at our asset allocation in terms of prudence, if you look at our very high solvency in terms of strength of the balance sheet, but also if you look at the limited sensitivity, for example, to interest rates, which is now roughly a third of what it used to be. And so we have also been very swiftly managing topics like inflation, topics like increase in interest rate through clear discipline around tariffication, but also through discipline around the cost side. When we look at this unstable environment, there is also a lot of upside because what we see is that in many areas, tectonic shifts are happening. So for example, when you look at retirement at healthcare, we see that there is big opportunity for us where we can capitalize on what we have, or if you think about the big new phenomenon about generative AI, we are a business that is working a lot with unstructured data. Up to now, we have had no chance to really use this data in a more scaled fashion. With gen AI, we are for the first time able to use both on the risk assessment side, but also on the claims side, this data. And then lastly, when you think about risks that become more difficult to ensure, for example, natural catastrophes or cyber, being able to offer prevention and risk consulting services will help us to keep these risks insurable. So the business has proven very resilient in a difficult environment and has shown that it can, despite this environment, deliver very predictable earnings. And I believe we are very well placed for this next phase, both in terms of continuing this very consistent and stable return delivery, but also capitalizing on these long-term trends that I just mentioned. This new plan is called Unlock the Future. Unlock the Future means that it is an evolution, not a revolution. We come probably out of a more revolutionary approach with the transformation over the last seven years. But as I mentioned earlier, we have got a platform now that works well. We want to continue the same strategy in scaling up what we have been doing well now. And this means that the focus in the next phase is very much on rigorous execution of the best practices. We want to address three different levers in this plan. Number one, driving higher organic growth. We believe that there are some areas where we can expand more, some wide spots, but we also believe that growing our distribution will enhance organic growth further. Secondly, we want to scale our technical capabilities. I mentioned earlier that the use of data and certainly the use of gen AI and AI in general will help us to become more sophisticated and more technically focused when it comes to pricing, claims and risk assessment. And then, thirdly, we want to continue to enhance our operational excellence through shoring, automation and data and AI, making sure that we are continuing our journey, which means that is an adapted strategy for an uncertain environment to scale up what we have proven to do well and not to go on a risky journey where we don't know what it means in this environment. All of this is happening on a base where our employees are extremely engaged. We have seen a significant improvement in our employee satisfaction, the employee net promoter score. To give you an idea, when we first measured it in 2017, we had a result that was minus five. The last result was plus 40, which we are really in the area of the top companies. But we are not only continuing to focus on delivering excellent results, we are also continuing to focus to play a very important and engaged role in society. You know that we have been very leading around climate transition, helping industries to transition. We want to continue this and make sure that we stay leading, but shift more towards climate adaptation, helping companies to do more prevention and also being more active on the underwriting side through more transition underwriting, i.e., focusing our underwriting capacity on those companies in more difficult sectors like energy, transportation and construction that have the heaviest charge of transition. Beyond climate, we would like to continue and scale up our engagement around inclusive insurance. We have been very strong in emerging markets and have managed to get – to cover 14 million customers. We see, however, that in Europe, a similar issue is there. So, for example, if you look into France, roughly 15% to 20% of people cannot afford insurance today because it's too expensive or are excluded. Rethinking insurance and making sure that we also offer something to these people is absolutely core for us. We want to start in France with a new range of products and then subsequently roll it out into Europe. When we look at this next financial plan, because we have a model that works well, because we have a model that is resilient in difficult times, we have decided to increase our financial targets, which reflects the confidence in the implementation of our model. The underlying earnings per share is moving from what used to be 3% to 7% to 6% to 8%, which is reflecting the stronger earnings base that we have. And the return on equity is moving from what used to be 13% to 15% to 14% to 16%. Thirdly, the cash remittance is moving from €14 billion to €21 billion, which is 50% higher than what it used to be in the last plan. If we manage to implement this three-year plan, it will certainly look very attractive for the shareholders, because with the new payout ratio of 75%, composed of 60% dividend and 15% share buybacks, it also means that we will be showing a very good return to our shareholders and that AXA should remain and will become even more a very attractive investment. When we look at how are we delivering value this very high return that we would like to give to shareholders will roughly equal €17 billion. €17 billion, based on yesterday's market cap, is roughly 25% of the market cap that will be returned to shareholders and 25% of the earnings will be retained in order to fund organic growth, as we've seen earlier, at a very decent and good return on equity. So having built a very distinctive franchise, now focusing very much on the continuation of our track record in execution, while keeping very disciplined in the capital management and being disciplined around a very strong balance sheet, our strategy will deliver a sustainable and attractive value to our shareholders. With this, I will hand over to Frédéric de Courtois, who will now go into detail on how we are going to achieve it. Thank you.

Frédéric de Courtois: Thank you, Thomas. Good afternoon to you all. Thomas has told you about what, what we want to achieve, the ambition. And I'll tell you about the how, the execution. Our plan is not revolution because our starting point is very good. Our plan is an evolution based on discipline and ambitious portfolio of initiatives. And I would like to discuss now about these initiatives. First, let's look at our franchise. Our franchise is very good and it is based on three principles. The first principle is that we are focused on geographies and businesses where we have scale. So usually top three and technical edge. The second principle is that we are focused on capitalized businesses. And the third principle is that we are a multi specialist, so very technical on a wide range of businesses. Wide range of businesses, because this is driven by distribution. And I have to say we like it because this wide range of businesses drives cross selling, but it also leads to lower capital requirements and lower volatility. These principles will not change over the next plan. If I look more specifically at our three business lines, our first business lines is Commercial line P&C, so from top clients to SMEs to around 35 billion premiums. This is by definition a worldwide business. And we are probably, because there is no official ranking, we are probably the biggest player in the world on commercial lines. Our second business line is health and employee benefit. We are the number one in Europe on health and we are probably the first player on employee benefit worldwide, outside of the U.S. This is again a worldwide business by definition. And you see that we have around 20 billion premium on OPA benefit and health. Our third business is retail and this business is local business. We have about 42 billion, so from P&C to Life & Savings. And we are doing it in a limited number of countries, about 20 to 25 geographies. And again, countries where we are usually top three, sometimes top five. Yes, so as mentioned by Thomas, we have three transversal initiatives over the next plan. The first one is organic growth, the second one is technical excellence, and the third one is operational excellence. And I will discuss later about the three initiatives for our three business lines. But before doing this, I would like to give you a high level message on growth and a high level message on technical excellence. On growth, you may have seen that our growth over the past three years, growth of the top line has been about 2% a year. And I am sure you know that this growth has been negatively impacted by some disciplined decision that we've made over the past three years. So we've been extremely cautious on CAT reinsurance, we stopped the international health reinsurance business, we've been extremely disciplined on general account. So we've been extremely disciplined, which obviously impacted negatively the growth. In addition to this, you need to take into account the fact that we have worked in 2023, and we've launched and we've started to finance a portfolio of organic growth initiatives. And this portfolio of organic growth initiatives will add an additional 1% per year to our growth over the coming years. So at the end, what we expect is a growth of about 5% per year of the top line over the coming three years. This is an indication this is not a target. We don't have a top line target, but I think it gives you a high level indication about our ambition. My second comment on technical excellence, I will start reminding you how we manage our business. We have a very important KPI at AXA, which we call the economic combined ratio. So, the economic combined ratio takes into account our capital requirements, taking into account our cost of equity, taking into account the expected investment return, takes into account the normalized CAT, and at the end you come out with a KPI which says if you are under 100%, you earn more than your cost of equity. By the way, we price our products with the cost of equity of 14%, which is cautious, but we are happy to have some buffers to face change of assumptions, change of context, and so on. And if I look at this KPI, our starting point is good, but we can improve. How can we improve on technical excellence? We've identified three main areas. The first one is about governance. You may have seen in June that we've created this Chief Underwriting Officer role. And our Chief Underwriting Officer, Nancy, is in charge of underwriting, pricing and claims, with the role of challenging and supporting our business units, and in addition to this, making sure that we scale up the good practices that we have around the world. The second area is that we have to turn around some businesses. If I look at my economic combined ratio in 2023 89% of our business was making a higher return than our cost of equity, which means that 11% was making less than our cost of equity. So, you can never be at 100% because you have ups and downs, and so on, but our ambition is to be at more than 96% at the end of the plan. And what are the areas where we really have to work to turn around the business? UK Health, UK Retail, Germany Retail are the three main ones. So out of the 11%, the majority is made of these three businesses. What I can tell you is that the turnaround of these three businesses is very well engaged and will be quick. The third area to improve technical excellence is a portfolio of concrete projects, and you can see them on the slide. I will comment on some of them, but I'd like to mention now only one, which is surely of interest to you, which is what we are doing on CAT. So, first, if you look at our market share of worldwide CAT, it has decreased over the past four years from around 3.4% to 2.7%. So we've done the job. We've done the job, but as you may have seen, in 2023, we are again above budget on our – on CAT. It is clear that CATs are increasing and they are more difficult to model because there are a lot of secondary perils. This is a fact, this is the threat, and this is also an opportunity. This is an opportunity if you can underwrite and price CAT in a very technical way. And we believe we have a technical edge on this. We have a technical edge because we've developed over the years our internal model on CAT, which we used in addition to the two market standards, and it gives us a lot of insights. We have a CAT underwriting platform and we are now rolling out a new version, which makes sure that everybody around the world is underwriting CAT in the right way and in a consistent way. And we are investing a lot on satellite imaging and geolocalization. So at the end, we believe that the CAT business can be underwritten profitably. So, summary of all of this. Our plan is about an accelerated growth of the top line. So we've said from about 2% to about 5% and is about increased margins. If I look at the undiscounted combined ratio, we expect to improve the undiscounted combined ratio for the P&C business by two points over the plan and we expect to improve the undiscounted combined ratio for life, protection and health by about three points over the plan. I will look now at our first business lines, which is commercial lines. So, commercial lines is a business in which we expect a growth at a rate above GDP over the cycle. And this is only partially cycle dependent because you may have seen that half of our premiums, a bit more than half of our premiums come from mid-market and small business, which are less cycle dependents. The main growth initiative for us is mid-market. Mid-market is a business we are doing well in four countries in Europe, so France, Belgium, Germany and Switzerland, and that we are almost not doing in other countries. We believe that this is for us a significant opportunity. This is a significant opportunity and we are going to extend this business to countries we know. So to other countries in Europe and in a selective manner in the U.S. again, this is a business we know technically, this is a business we are going to do only in countries we know well. This is a business in which we're able to build global programs. So we have a competitive edge for this business and it will be a growth opportunity for us starting from the next plan. My second comment on technical excellence and commercial lines is about cycle management at AXA XL. You know that over the past years we were very much focused on the turnaround of AXA XL and it has worked well. Now we want to manage the cycle more than we did before. We want to manage the cycle on underwriting and we want to manage the cycle on ceded reinsurance. So on underwriting, it means that we will underwrite the business when we like the prices. We will not underwrite the business when we don't like the prices. On ceded reinsurance, of course, our ceded reinsurance program is built based on our risk appetite and volatility expectation, but it's also based on the return on equity of the cover. And depending on the price, we may be also opportunistic, and we started to be opportunistic at the end of 2023. So more cycle management at AXA XL and more cycle management for ceded reinsurance. By the way, you can see on the slide on the right part, that the cycle for the various business lines is not the same, which is an opportunity and which means that you have to underwrite in a granular basis. So for example, the – on some lines like property, now the cycle is very good. On some other lines like cyber and D&O, the cycle is less good. And this is about portfolio management, and this is what we are going to implement in a more ambitious manner. Moving to our second business line, which is employee benefit and individual health. This is also a business line in which we expect a growth, which is above GDP. So this is clearly a growth opportunity. Our main growth initiatives and this is about employee benefit for SMEs. Usually, big corporates are insured. SMEs are not or the employees of the SMEs are not, and we believe that there is a significant opportunity for us. We have unique capabilities. We have scale, we have data, we have innovative services. And we especially have an internal tech company called EB Partners, which develops for all our employee benefit business around the world, tools and services, underwriting tools, services for the HR departments of our clients, services for the employees of our clients. So we believe that we have everything we need to develop this SME business for employee benefits. On technical excellence for health and employee benefit, I'll start saying that we should recognize that we had three profitability accident over the past three years. I think that's important to recognize it. First, we had COVID. Then we had the health international reinsurance. And now in 2023, we have the Health UK business. So three years in a row, we had an accident on the health business. It should not hide that we have a very good, sound and big business on health. But we've learned from this. And our main conclusion is that the best players are specialists. And this is why we've decided to create in June this dedicated business units inside the AXA Group to have a business unit dedicated to employee benefit and health, to have people thinking 100% of their time on health. And we believe that it is the secret for a successful health business. Concretely, what does it mean? It means that we will accelerate what we've already done. And what we've already done is having global pricing models. What we've already done is that we have global data sets. So we are pulling health data around the world to have better data to underwrite, but this is something we've already done that we are going to grow and to develop and again, to think as a specialized company. The third and last business lines is retail. On retail, we expect the growth at about the same pace of the GDP. We have a very good retail business, and we have a very good retail business, driven by excellent proprietary distribution. Where will the growth come from? Basically, the growth will come from three areas. The first one is we've decided to grow our proprietary distribution channels. This is pretty new because we were very much focused over the past years on growing the productivity. And I'll come back to productivity. Now we've decided to grow also the size of our distribution channels in France, in Europe, in Japan, and we've concluded that this is probably the best investment we can make. We have very good distribution channels. So adding resources to three distribution channels is a very good investment. The second area is about productivity. We are again going to grow productivity over the next plan. The plan that we have is to grow the productivity by 10% over the next three years, and we will be very much helped by AI. The last cycle was very much helped by the fact that we learned to sell without meeting physically the client. Now AI will help a lot and help us a lot on managing leads and so on and so on. The third growth opportunity for us is the Life business. Life business is important for us. Life business is about protection and savings. And we believe that we have extremely good opportunity as, for instance, we are going to relaunch our savings business in Belgium that we had stopped some years ago. We are going to relaunch our individual health business in Switzerland. We believe that we have significant opportunity in Asia. We believe we have significant opportunity in Germany. We are determined to accelerate our CSM growth above 3% a year while remaining disciplined. On technical excellence, a word on P&C Retail. First, it's a lot about data, tech everywhere. So this is a lot about industrialization. And I do not resist the temptation to make a teaser on what we call our computable contract initiative. I'm not sure you've heard about this. We've worked over the past six years with some universities to build computable contracts. You know that insurance is about contracts at the end. It's about contracts, and they are all different. Computable contract is a contract that can be read by a computer to make it simple. It has huge benefits for the clients because the contract is much more clear and it has huge benefit for the company on the productivity, on the leakage and so on. We started over the past two years to implement computable contract for retail business. It's a 10 years' work, and we are going to do it also for commercial lines. The last initiative I would like to mention is operational excellence, which is a transversal initiative for our three business lines. The first objective of this initiative is to decrease our non-commission expense ratio by 0.5 points to 9.3%. So a quite significant decrease of this expense ratio. And for this reason, we are going to be extremely focused on efficiency and productivity over the next plan. We have four ongoing initiatives. The first one is continue and complete the basics. What are the basics? The basic is about our common infrastructure, and we have already a common infrastructure, and we are going to complete our move to the cloud by 2026, so huge work. The second one is that we are progressively moving to a common architecture for all our systems. The third one, again, on the basics is that we're moving to a common data taxonomy for all our systems. And the last I would like to mention is that we have moved over the past years, and we continue to do it to common systems for support and control functions. But we've decided to keep local systems for insurance applications. So this is the first initiative. This is about building the basics. The second initiative is to automate all simple tasks. So this is about industrialization of what we've been doing over the past years. The experience that we have is that for operations, which represent 40% of our headcount, we were able to improve productivity by 3% a year. So automate all simple task. The third initiative that we have is to offshore more. We have about 10% of our headcount in offshoring, so about 11,000 people in three offshoring centers, so in India, in Morocco and in Poland. We will grow it to 12% by the end of the plan. And why do we do it? We do it, we still do it, obviously, for cost reasons, less than before, but we still do it for cost reasons. But we also do it because we don't find any more the right competencies in our mature markets, especially we don't find enough engineers. So for us, this is an opportunity also to find the right people. So we don't offshore anymore low added-value tasks. We offshore high-value added value task. The last initiative that we have is to scale up our data and AI projects. It's easy to build pilots. It's easy to build use cases. It's difficult to make scale up and to do it everywhere. Together with Alex, we are extremely focused on this. We have 400 use cases around the world, but we have identified 17 that we will implement everywhere. Conclusion, I said that our plan is about execution, but what makes us confident that we are going to be able to execute well. First, I think we have a good internal governance. A good governance is a governance in which people work together, but you know exactly who is deciding what. Second, and I am obviously totally biased on this. I believe we have a good management team. What I can tell you is that we have a very good team spirit. And as mentioned by Thomas, we have also high morale because our employee Net Promoter Score is at the highest score ever and can be probably improved again. Last but not least, we have strong capabilities and a good track record, because we’ve achieved all targets of the last plan. So, this is where we are. We have a good plan. And what is new about this plan is that we really want to share more and to scale up. How do we do it? We do it because we’ve built centers of excellence. So our centers of excellence, to give you some examples, we have one on AI. We have one on cyber insurance. We have one on EB. And we also have communities and expert networks to make sure that what we do is really scaled up. So we have a clear plan. We have the right team. It’s all about execution, count on us. Thank you.

Alban de Mailly Nesle: Good afternoon. So, we have a clear plan. So, now, what are the numbers behind this plan? So, if I look at the big picture in terms of earnings growth, we plan to increase our underlying earnings per share by 6% to 8% every year and on average, but every year. You know that we increase our earnings, but we have a strong focus on cash and capital generation, and we have had that for a number of years, which allows us to transform those earnings into cash for AXA SA (EPA: AXAF ). And so we plan to have €21 billion of remittance for AXA SA over the next three years. That compares to the target that we had for the last three years, which was €14 billion. And we, as you know, surpassed that because we had €16 billion. But nevertheless, it is a significant increase compared to the previous plan. We have also increased our target return in the sense that we had 13% to 15%. We are moving to 14% to 16%. Why? Simply because we are increasing margins, but we are increasingly a capital-light company, which allows us to have that high level of ROE. And when you combine all this, that allows us to have a best-in-class payout ratio at 75% with a strong commitment on it. And I will come back to that later, and notably on the dividend. And all this is done while maintaining a very strong balance sheet and not at the expense of our financial robustness. And so you will see that, obviously, those targets are ambitious, but they are realistic. And let me explain why we believe they are realistic. Let’s start with the underlying earnings per share growth. So as I said, 6% to 8%, made of 2% coming from the benefits of share buybacks and 4% to 6%, let’s say, 5% to simplify coming simply from underlying earnings growth. But when we build this plan bottom up, we took into account a number of headwinds that you all know and which, for some of them are significant. And so it’s very clear for us that, for instance, the unwind of the discount benefit will be a drag. It’s very clear for us, and as Frédéric said, that we will increase a bit our Nat Cat load to take into account secondary perils. It’s clear also that prices at AXA XL have probably reached their peak or close to that. And also that interest rates will probably be slightly declining with the impact that notably on the discount on P&C. And last, we also have the OECD tax reform that kicks in this year and that we also have taken into account. So all this is in our plan, and when we say that we can grow underlying earnings by 5%, that’s after having taken that into account. Now, let’s look into the details of our underlying growth. P&C, we plan to grow our underlying earnings by 4% to 6%. The global picture is, we will grow our revenues at 5%. And that’s in line with what Frédéric said when he said that we wanted to grow like nominal GDP, but I’ll come back to that. We reduce our combined ratio by 2 points over the period. We will have, as I said, that drag from the unwind, but it will be somewhat compensated, but not entirely by additional investment income. And finally, we will have – we know that you may have seen in our presentation and in 2023, we had positive tax one-offs that we will most probably not have in the plan, but conversely, we will have the OECD tax, and so compared to 2023, that’s €200 million less earnings. Now, if you look at the detail by line of business, the dynamic will not be the same between commercial lines on one hand and retail lines on the other hand. Commercial lines, we plan to grow slightly above nominal GDP simply because we have a number of initiatives that Frédéric has just described on mid-market, on new risks that will – I will not go through, but nevertheless are significant to boost our growth. Margins on commercial lines, we believe that at AXA XL, as I said, prices will probably increase a little bit, but in line with loss trend. And therefore, we don’t expect margin expansion at AXA XL of other plan. Conversely, for what we call the GIs, the AXA – the other AXA entities that focus on the SME and mid-market will still see some potential for margin expansion there, both because of price increases and also improved underwriting. On the retail side, the growth will be slightly lower because we want to focus on profitability there. And you may have seen that in 2023, we had a deviation in our attrition loss ratio on the retail side that we want to amend, and we want to amend extremely quickly. So on this, and when I look at our margins over the plan, so the 2 points combined ratio, more than half of that 2 point improvement will come in 2024, notably because of the recovery that we will have on the retail side. As I said, we have increased our cat budget to 4.5 points to take into account the secondary perils. Our reserving policy has not changed, so we will carry on having positive PYDs. And you know that we want to use those PYDs to offset, if need be, volatility coming from Nat Cat and discount going forward. And as Frédéric said, we will improve through productivity, our expense ratio by 0.5 points. And that will reflect into our P&C combined ratio. If I now move to Life and Health, you have, as you know, different components in our P&L on Life and Health. You have the CSM for all participating businesses. CSM, we plan to grow it at a rate above 3%, given the quality of the business that we have, and the CSM release will grow proportionally, i.e. as well above 3%. But what you need to have in mind as well is that on the Life and Health side, we have €15 billion of premiums that are P&C like where the combined ratio, and therefore less inertia than the CSM itself. That’s the EB and individual health business. And as was said earlier, we plan to grow that business and we have a good number of initiatives at a high rate of 6%. So that’s the €15 billion that we want to grow at 6%. But we also want to reduce the combined ratio of that business by 3 points over the next three years. And within those three points, you have the recovery of the UK Health business. So there, again, very significant portion of those 3 points, again, more than half will come in 2024. As to investment income and unwind, we plan to have a balance, so it will be reasonably stable over the plan, the higher investment income offsetting the higher unwind. And overall, like for P&C, we plan to have earnings growth between 4% and 6% in Life and Health. But again, what I want to emphasize is the fact that that short-term business that represents today one-third of our profits will represent two-third of the profit growth over the plan, give or take. Moving to Asset Management. So Asset Management, we have a very strong platform both on what we call the core part, i.e. the liquid assets on the Alts part the other alternative assets. You probably have seen that in 2023, we had very good net new money from third parties, with a good balance between the two platforms. We plan to have that over the next three years, repetition of that plus cost containment, and therefore, we plan to grow our earnings by 7% every year at AXA IM. On the holding side, you will see a slight deterioration for a couple of reasons. One, simply its AXA SA that borrows the money and therefore with the higher interest rates, cost of debt will be slightly higher, first point. Second point, even if the bulk of the investment in technology is done at local entities level, you still need – you will see some – you will still see some at AXA SA level. And last, you will have part of the impact of the OECD tax at AXA SA level. To be clear, Bermuda has implemented a new tax kicking in next year and that impact you will see at AXA XL, but when it comes to the other countries that are impacted by the OECD tax, i.e. for us, Ireland and Hong Kong, the cost will be borne by AXA SA because the tax is due to the French government. So those are for our earnings. Now, moving to capital generation. I want to insist on the transformation we have gone through over the last years in terms of capital requirement. We have significantly reduced our capital requirement and moved to a capital-light business. We’ve done that through the change in business mix, moving from typical, general account, heavy on capital business to more capital light business, and moving to P&C. In the design of our products, and notably on the savings side, we have reduced the amount of guarantees and you know that we are working on products that have only a guarantee at maturity, which is also in the interest of our customers, but in our interest as well because it reduces the capital required. We have reduced our duration gap to zero. That has significantly decreased our sensitivity to interest rate. And finally, we have implemented that group internal reinsurance, as you know, which means that the earnings that we create, create more solvency in terms of point. So we told you last year that we would generate 25 to 30 points of solvency every year. In 2023, we produce 29 points. But that guidance is still true for the next plan, 25 to 30. I just want to make it clear that it's after the funding of growth. It's net of that growth, which we believe will cost us 4 points of solvency every year. But nevertheless, we will grow – we will have capital generation of 25 to 30 points every year. Having those earnings, having that capital generation, and having worked a lot on the remittance from the entities to AXA SA. That means that AXA SA will receive a lot more cash in this plan than in the previous one. We target an 80% remittance ratio. We were at 79% in 2023, so 80% is normal for us now, which means that AXA SA will receive over the three years more than €21 billion of cash from its subsidiaries. How will it use its cash? €3.5 billion will be over the three years, the cost of AXA SA, interest on its debt and general expenses. We don't plan to keep a lot, if anything, more at AXA SA level in terms of cash, which means that everything else will be paid out to our shareholders in the format of a dividend and share buyback. So €17 billion to our shareholders. And as Thomas said, that represents roughly 25% of our market cap today. A word on our ROE, I mentioned that at the beginning, we have increased it to 14% to 16% as a target, for the reasons I mentioned not to be on the fact that we are capital light. You see, the ROE per business is good in all our lines, 14% in life and health, 16% in P&C and 25% in asset management, which means that the 25% that we will not redistribute to our shareholders, but that we will keep for our growth will be reinvested in a business that has very good ROE and that will also drive the growth of our book value. As I said, all this is not done at the expense of our balance sheet. We are operating now at a level which is 227%. We intend to operate at a level which will be at that level, give or take. And why that? Simply because even after the dividend and the share buyback, we will have a bit more solvency every year thanks to our significant capital generation. And very importantly, because the sensitivities of our solvency ratio to financial markets and notably to interest rates have considerably reduced over the last two years. So we have a robust balance sheet, we have a significant solvency ratio and we don't plan to depart from that. Cash, it was €4 billion at the end of 2023. As I said, we don't plan to retain a significant amount of cash at AXA SA level coming from the entities. So you can plan on a stable level of cash at AXA SA. And last on our debt, we maintain our 19% to 23% gearing ratio guidance, but nevertheless we don't plan everything else being equal to issue debt on a net basis. Obviously, that we need to tackle the end of the grandfathering, but apart from that, on a net basis, we will not issue new debt. So that brings me to the capital management policy. So what is it exactly? A 75% payout ratio made of 60% from dividend, 15% from annual share buyback. So 75% of our underlying earnings per share will be distributed every year. The dividend per share will be at least equal to the prior year's dividend. So we introduce a floor to our capital management policy. And we are also extremely clear on the fact that you will have dividend and share buybacks first, and then only M&A. So M&A will not be done at the expense of buybacks. And last, we keep what we had for the last plan, which is the fact that whenever we would sell a business or we would do an enforced transaction, we would neutralize the impact on earnings through a buyback in order to maintain our earnings per share. So that's our capital management policy. Thank you.

Thomas Buberl: In summary, four things to remember. Number one, we have built a very distinctive franchise that is balanced and that has worked well in an uncertain environment. Second point, we have a platform now that is able to consistently deliver with very predictable earnings. Third one, our plan is to do more of the same. So scale up what has been done well in one place, to do it everywhere. We believe this is the best strategy in an environment that remains uncertain, focus is really on disciplined execution. Fourthly, the new plan that is built bottom up will come with higher financial targets and, as you've seen, with a more attractive capital management policy. Thank you. And we're now moving to your questions and our answers. And since I'm still in debt to Andy Sinclair from last time, when I couldn't let him ask a question, because we ran out of time, he's got the privilege to ask the first question today.

Q - Andy Sinclair: Thank you very much. A man who clearly keeps his promises. Thank you very much, Thomas. Three for me. It's Andy Sinclair from Bank of America (NYSE: BAC ). And I would like to say as well, welldone for the targets and for making those commitments to shareholders. It's a big deal and it is appreciated. First is on holding company cash. I like the remittance targets and commentary you've given. I just really want to dig into a little bit in terms of what's in there both in 2023 and going forwards.

Alban de Mailly Nesle: Holding cash?

Andy Sinclair: Holding company cash. So I just want to dig into what's in there for both 2023 and going forward. When I look at the 2023 numbers, I know there was meant to be some cash coming through from the holding company becoming a reinsurance mixer. I think there was talked about maybe €1 billion coming up in 2023 and another €1 billion in 2025. I didn't see that much coming through in 2023. I'm just keen to understand how much of the future cash is included in the €21 billion target. Likewise, the French transaction I think was guided for €600 million. I think only a bit less than that came through. And likewise, we've clearly got the German transaction that's still out there. What's included in the cash numbers in 2023, what's in the €21 billion is my first very lengthy question. The others are shorter, don't worry. Second question was just an update on what scope there is there still for back book management. What more is there to be done over the plan? And maybe as part of that an update on the German disposal. And the third question was just on the reinsurance renewals. Looks like, you've kept your retentions flat while adding more capacity. Good to see, nice and conservative. But when I look at the slide about the one in 20 risk deviation, it looks like the one in 20 deviation has actually gone up. And I think that's deviations even from a higher Nat Cat budget. Just keen to understand that. Thank you very much.

Thomas Buberl: Thank you, Andy, for your three questions. Alban, I propose that you asked the first question, which was, in fact, two questions. One is, what is in the €21 billion and what is in the €4 billion holdco cash in 2023 and going forward and are the transactions citadel, the reinsurance French transaction and potentially German transaction in there. Second topic was around the scope for back book and update on Germany. I would take that. And then thirdly, Scott, if you could take the question around reinsurance renewal and the question around the one in 20 risk deviation and relation to Nat Cat. Alban, first question.

Alban de Mailly Nesle: Yes. So you probably remember, Andrew, that there were two different benefits in transforming AXA SA into a reinsurer. There was the fact that we merged it with AXA Global Re and by having that, we had €700 million cash from AXA Global Re coming into AXA SA. So that's in the line other that you have in the table and you have €400 million in 2022, €300 million in 2023 or the reverse, but that's not in the remittance as such. But the other benefit, which is simply to have cash at AXA SA that is included in the 6.3 remittance. And therefore, that all is also included going forward in the €21 billion remittance that I showed a minute ago.

Andy Sinclair: The recurring benefit.

Alban de Mailly Nesle: Yes, the recurring benefit. Does that answer your question? Yes. Sorry. So on the – first, on the French disposal, you should bear in mind that the net cash benefit will be minimal given that we have a – we will launch a share buyback up to €500 million quickly to offset dilution coming from this transaction. So don't expect a net benefit on this or minimal one. And on the German transaction, we have not closed it yet. And so there is no benefit of that in our past numbers nor in the €21 billion.

Thomas Buberl: Second question, Andy, which is half answered. So any more scope for back book? I mean, we have to go back again to see what we have done in terms of back book transactions. And probably we've been the most active actor in the industry around back book since we came at the time from 80% being in life insurance. Today, the job, I would say, is considered to be mostly done. There might be a few portfolios here and there that we would still look at, but is it something that we would focus on 24 hours a day? The answer is clearly no. And as Alban said on the German back book transaction, still ongoing, we are expecting this to drag into, I would say, till the end of March to have a concrete result. Scott, on the reinsurance?

Scott Gunter: Yes, just on the one in 20, Andy, a couple of things. One, Frédéric mentioned, we're leaning into the model. We've updated the model, so you get a little bit of an update to the models, particularly on that one in 20, which is almost the attritional cat, if you want to call it that, which is that active working cat. And we've seen that certainly in 2023, where there was 100 billion in CAT losses, all of it in that sort of working CAT area. Second one is we’re leaning a little bit more into more recent years in the models, right? So there’s been more CAT activity in more recent years versus the past. So you see a little bit uptick, particularly again in that one in 20 working layer. And then the third component is we’ve had – with market conditions and pricing, we grew our property portfolio as a percentage of our overall portfolio. We grew property more in 2023, right, because the pricing increases continued there. So we had a little more property writings. So all three of them contribute to that one in 20.

Thomas Buberl: Michael?

Andy Sinclair: Thank you very much. One is very lightweight questions, I’m afraid. The first one is, what are you going to do? I mean, I know what all of these guys are going to do, but what are you going to do? Because it sounds like the no deals, everything is the machine is running smoothly.

Thomas Buberl: It’s a simple answer, put these guys on fire.

Andy Sinclair: Yeah, exactly. No, that’s fair. But I suppose the real question is, if insurance is such a great sector at the moment, why did you want to buy more of it in whatever form? I mean, if you look at the numbers, maybe there’s $2 billion left for M&A. It sounds tiny. And then the other question is a much more kind of numbers question. So you said UK Motor or UK Retail and UK Health, I’m assuming that’s the half of the improvement in combined ratio. Can you actually give us some numbers just for 2024? That’d be so helpful. And I’m afraid that’s – yeah, and the last question, the $17 billion, I can’t reconcile and it’s a silly question, but if I add the $7.6 billion, the $8 billion and the $8.4 billion, so growing the $7.6 billion at 5% a year, that’s $24 billion, 75% of $24 billion. And maybe my math is wrong is $18 billion, it’s not $17 billion, but hey, it’s a small run.

Thomas Buberl: This was obviously the test for today. No. So the first question, I guess I have to answer. The second one on UK Health and Retail, Patrick, if you could answer that. And the last one on the $17 billion and reconciling this Alban, if you could do that. So, on the first question, I mean, obviously we are coming from a period in which we have done a lot of deals. This was absolutely necessary to build what AXA is today. Today, as I said earlier, we have a franchise that is balanced, that is well diversified, so we don’t need to rely on doing more M&A to make it better. As I said, the spirit of this plan is really to scale up. So because we have been focusing a lot in the last phase on deals, we probably did not focus enough on the organic improvement and the organic scaling. And so if you ask what I’m going to do, I’m not going to work on deals anymore, but I’ll be working on helping my colleagues to really work on the scaling up. So what has worked well in one place, how can we make sure we scale it up? Because we have a good platform and we have enough power ourselves. And you’ve seen we are investing over $2 billion in really making it work. So that will be my new day job going forward. Patrick on UK Retail, UK Health?

Patrick Cohen: Yes. So, UK Retail and UK Health, thanks for the question and good afternoon to everyone. Well, turnarounding this portfolio is number one priority for Europe. I’m going to walk you into some of the actions we’re taking. It’s very bold actions, comprehensive programs, no stone unturned from pricing and writing claims. We also changed some members in the team. The person now leading UK Retail is the ex-CFO of AXA Switzerland, and we’re bringing someone from the competition on health. So let’s start one by one. So if we start with the UK Retail, well, you know, it’s a tough market, it has been a tough market last year. Fundamentally we had planned for inflation and if you remember, across Europe we had an increase of price of 11% and in the UK of 44%. And that played well. We got hit by two things that I think hit the market. One is a very high level of a nat CAT and the second one is a bump in frequency around 8%. Fundamentally blurred patterns post-COVID that hit, I repeated all the market. So what are we doing very concretely? So after the very strong price increase in 2023, we are putting double digit price increase in place already. We are re-underwriting part of the portfolio. So we’re looking broker account by broker account and pulling out in some of the less profitable areas of the portfolio. So we’re pulling out of bytes, out of telematics, out of some geographies, where fundamentally we get data on higher theft. And so we are very, very granular into that. I must say, I have a weekly meeting with the team on this and we’ll have right one after that today. So we’re pruning part of the portfolio. Something that is very important as well is what we’re doing on claims. I believe that across Europe, by the way, we can do far better on claims in the context we have seen. There is upside there. All the IT and technology budget of the UK is fundamentally today put at work for the technical excellent part of the business. So we shuffle completely in the investment in that direction. And on claims, where we’re obsessed with the orientation, I’m seeing it picking up in the last months, we’re also seeing, thanks to AI and predictive recovery tool recoveries going up, fraud is also peaking. So all those metrics are going in the right direction and we’ll continue to invest in that place. Last but not least, so I talked about we’re doing on the portfolio, on the pricing on claims, I want to talk about the expense management. We have far tighter expense management objectives for this year and we want to simplify, globally speaking, our organization set up as a whole in the UK to try to bring this business in retail back to profitability. To your question, in 2024, that is the objective. Now, if I’m moving to the UK Health, well, you know also there that this is a market phenomena. Fundamentally, the NHS performance deteriorated post-COVID, you know the stats. I think it’s more than 7 million people that are on waiting list in the UK. So it’s a quite bold and profound phenomena. I should say right from the start that our UK Health business is a very healthy one. We got 30% market share on a $2 billion business and it had typically a combined around 96%. So a very strong position. That’s the base we’re starting from and we’re addressing very intensively what is at stake here with the NHS deterioration. So there again, very, very unprecedented, I would say prices increases across all segments, individual SME and large corporates. To give you an idea, we’re repricing all of our corporate and SME book to be profitable, all of it this year. We have done, obviously, some pruning and what we have done as well is investing in our ability to reprice far more frequently. So if we could do that from a quarterly basis now, we’re going to be able to do this months-by months. Last but not least, and very importantly, because that’s the – I think, part of the name of the game in health. We are absolutely obsessed with steering there, so we increased steering in the last six months by 30%, so all our teams are absolutely focused on this. We’re reviewing steering as well as part of our terms and conditions. We want to have more guided products. We’re working on network management and also on AI by scaling some of the fraud tools we have. Last but not least on the claims front, we’re also working on pathway management. I think that’s quite innovative. We have now medical protocols that enable us to do two things on one end, better medical outcomes for our customers, but also, obviously cost containment for us. So when it comes to the numbers and what we are aspiring to do, as I said, we were around historically, a combined 96%, we’ll get closer to that. So the bulk of the turnaround will happen this year.

Thomas Buberl: Thank you, Patrick. Alban, $17 billion reconciliation.

Alban de Mailly Nesle: If I can complement Patrick’s answer and committing on his behalf, that should represent $350 million before tax overall, between the Health and Motor. On the $17 billion, I think the difference with your calculation might well be that in 2024, 2025, 2026, we pay 75% of 2023, 2024, 2025 earnings. So we have a one year lag and I think that’s the difference.

Thomas Buberl: Farooq.

Farooq Hanif: Hi. Thank you very much. Farooq Hanif from JPMorgan (NYSE: JPM ). Just want to go back a little bit cheekily to the M&A question or just actually, why do you need 227% solvency ratio? Because clearly your sensitivities have gone down. I don’t think M&A is a dirty word anymore, given what you’ve achieved or you could reduce debt? So I’m just kind of understanding why you need that surplus. And if you were to do M&A, I mean, you did layer, would health – would employee benefits be the obvious kind of bolt-on area to look at? Second question is on XL Re. It seems every time I speak with management, there’s kind of, yeah, we’ll go with it, maybe we don’t need it kind of attitude. So what’s your position right now in the business and how much capital is in it if you did run it off, for example? And then third question is on your macro assumptions. So it’s really good that you embedded this into your numbers. I don’t think every insurer does that in their guidance. So can you explain, particularly around interest rates, what you’re assuming? Is it the forward curve? Can you give us some sort of guidance on where we should expect the sort of three, five year, 10 year to swap rates to fall within that? Thank you.

Thomas Buberl: Thank you, Farooq. So I’ll do the first question, Frédéric, if you can do the second one on XL Re, what is happening? How much capital is in there? And then, Alban, if you could do the third question around the macro numbers. On the first question. It’s interesting to have that question now, because for the last seven years we always had the reverse question. However, I will not change my answer. First of all, the balance sheet strength of 227%, I think is a great achievement. And not only so much the absolute level of solvency, but certainly the sensitivities around the solvency. As Alban mentioned, the interest rate sensitivity is a third of what it used to be. And so we feel very comfortable with that solvency. And therefore, we also have not given a new target around solvency. And you’ve seen that we will automatically create more solvency as we go along. You’re absolutely right. We did some M&A deals recently, but smaller ones, so if you look into Turkey, if you look into Spain, if you look into layer in Ireland. And so we are saying that our hierarchy is very clear. Dividend first, share buyback second and then when there is money left and there is a sensible M&A deal in the spirit of a layer or what we have done on credit mutual in Spain, we’ll certainly look at it. But the focus is very much on organic development of our platform. And therefore, you see there is no target of earnings increase from M&A in our plan. Frédéric, on the Reinsurance?

Frédéric de Courtois: On AXA XL Re. So our priority number one was to make money with this company, which we had not done over the first five years. And we had last year a result of €487 million at AXA XL Re on a capital of about $3.5 billion. So we are happy with what has been done. By the way, Nancy was the CEO of the Reinsurance. The cycle remains good. The renewals on the first of January have went well. So we believe that 2024 will again be a good year. Then now we are a company of a bit less than 3 billion premium making money. That’s where we are.

Thomas Buberl: Thank you, Frédéric. And then let’s go to Alban on the macroeconomics.

Alban de Mailly Nesle: So on the interest rates, our view is that, I mean, like the market, we believe that central banks will reduce interest rates very progressively. And when there is strong evidence that inflation is under control. We believe that – I mean the pivotal year is the five year rate for us given the discount. And we believe that it will stabilize probably where it was at the end of 2023, which is a bit lower than what it is today. And we will have the normal slope between the short-term rates and five year and the 10 year. But that is probably in 2025. I’m talking about the short-term rates when central banks have reduced their policy rates.

Thomas Buberl: Thank you, Alban. Let’s go to Peter.

Peter Eliot: Thank you very much. Peter Eliot from Capital Cheuvreux. The first one on the two points of combined ratio benefit, I mean a great ambitious target and sounds great, and clearly, a big driver of the EPS improvement. I’m just seeing – I mean, some of those parts are very much within your control on the expense side of things, some of them probably Nat Cat, for example, less so. You mentioned over sort of one point coming from retail, but I guess things could change between now and 2026. So, I’m just wondering if you can sort of give us some comfort on where you see the main sort of risks to achieving that overall? And therefore, sort of how confident we can be in that number. That’ll be the first one. The second one was on the discount benefit that you had. I think H2 was 3.2% up to 4.2% in H1. And I’m just wondering if you can just elaborate why there was such a big drop if my math is right, whether there was more seasonality than we thought? Related to that, the duration has sort of stayed down at the half year level of 3.7%. So quite a big drop from last year. And I’m just – yes, just interested in understanding those moving parts would be great. And then maybe a third one on the dividend, I guess the message in the past has always been, we should expect it to grow in line with earnings. Now it seems to be – we’ve taken a bit of a jump, and it’s a more clear link to a payout ratio. Should I think about that in line with the new strategy, very much focused on organic growth, therefore, a payout ratio is more appropriate now, especially everything you’ve said on M&A. Is that the right way of thinking about it going forward?

Thomas Buberl: Good. Thank you, Peter. So on the first one, Frédéric, if you could talk a little bit about where are the main risks in achieving the 2% combined ratio improvement. Alban, the discount benefit and the change in it is for you, and I’ll take the third one on the dividend. Frédéric?

Frédéric de Courtois: So first, on the two points. If I look at commercial lines and retail, most of the improvement will come from retail. And if I look at how will it happen basically from the two points you have, 0.5% combined ratio, which is the expense ratio. So I would say, high level of confidence. And then out of what remains the 1.5 more or less half is the turnaround of the business in Retail UK and Retail Germany and half are improvements coming from all our initiatives. So the degree of certainty is really high in the expenses is really high on the turnaround in Germany and the UK. Then the third part, we have to work hard, to implement the tools on the tech tools, the data projects that we have and so on. So you could argue that there is a big certainty.

Alban de Mailly Nesle: Then on the discount on the H1 versus H2, I leave aside the interest rate part because that you know as well as I do. So there is – there are two things, a minor one, which is the fact that, there is always a bit more discount in H1 than in H2 because you discount the claims that you will eventually pay in H2. But the more fundamental part is every year, we will review with great scrutiny or payment plan. And looking at it in H2 has led us to see that the duration is shorter. I think we had 4.2 years, and we now have 3.7 years. And that’s because looking at all our reserves, the payment pattern, it has shortened compared to what we had a year ago.

Thomas Buberl: On your third question, Peter. I mean, look, the reason why the Board has decided to propose a higher payout ratio on the dividend was clearly linked to the model change that we had. I mean if you go back, having a model that is highly reliant on financial risk means that you have a lot volatility. We have worked hard over the last seven years to bring volatility down. And certainly, what I mentioned earlier around the interest rate sensitivity being a third of what it used to be. I think, is a good illustration of it. And that’s why we feel comfortable with the consistency of the model and the consistency in the delivery to go higher. Secondly, we wanted to establish a very clear hierarchy around dividend first, share buyback second. And then if there’s anything left and if there’s any interesting opportunity, small M&A. So it’s very clear around the question, are you still going to go on big M&A that the answer is definitely no. And that there’s also like screwed in that this answer will be no, and that there is a clear commitment to the market. And then thirdly, your question around will the dividend grow in line with earnings? Yes, the absolute dividend will continue to grow in line with earnings. Andrew?

Andrew Crean: Good afternoon. It’s Andrew Crean of Autonomous. This time last year, you told us that personal lines would be flat margin. The claims ratio is up 2.5 points. Why should we have confidence that you can improve it and it can be such a substantial part of the two points this year because I think you’re saying it’s coming – a lot of it’s coming this year. Secondly, on XL Insurance, given the softness in financial lines, which is a big part of your business. Do you expect to make more money out of XL Insurance in 2024 than 2023? And then thirdly, just generally, on the overall earnings per share growth, it does look as though you’re quite challenged in 2024. Last year, you gave us an expectation of about €7.5 billion or more than €7.5 billion in earnings. You haven’t given us a forecast for 2024. And if there’s a weakness in the plan, it would seem to me that you’re starting from behind the start line in 2023, 2024, and you may struggle to get to the start line then?

Thomas Buberl: Thank you, Andrew, for your three questions. The first one, it would be good a shared answer. Frédéric, if you could start around the claims ratio, bearing in mind, Andrew, that we have yearly contracts. So if you see a phenomenon you always have a certain time lag. And then Patrick, if you could maybe talk about the German case in detail what it means of how to implement the improvement. Secondly, around XL Insurance and the financial line, Scott, if you can give a quick overview of where do we stand and also show that this is life implementation of what is called cycle management. And then thirdly, Alban, if you could talk about the – I mean the 2024 because Andrew, we will not give a forecast this year. We have only given a forecast last year because of the switch from IFRS 4 to IFRS 17, but the question to give a flavor on the 2024. Frédéric?

Frédéric de Courtois: I’ll start. Thank you, Andrew. First, you’re right on your assessment. So we had planned to have stable margins, and you’ve seen that the combined ratio is increasing. The reason for this is that there has been a lot of unstability following COVID. So as mentioned by Alban, we had planned well for inflation, which was not so easy. We had spikes in frequency in Germany, and in UK retail, and a bit of Ireland for reasons, which are not 100% clear yet. What makes us confident that we will turn around these businesses. So Patrick has discussed already about the retail P&C will discuss about the UK P&C. We’ll discuss about the German one. But we are clear on what we’ve done including Germany on the 1st of January, what we’ve done on price increases, which has gone well. We are clear on what we are doing in the UK on price increases. So this is the immediate impact then this is the opportunity for us also to review the way we manage claims, which is something that we have to do constantly and we have projects ongoing. So my view is that we have a very high probability to achieve this turnaround in Retail UK and Retail Germany, knowing again that this is not a widespread phenomenon. This is a phenomena, which is focused on two countries, well identified on portfolio that are well identified. So, I wouldn’t say if this is easy, Patrick. But I would say this is not as if we had a – an overall crisis on our retail P&C business.

Patrick Cohen: Thank you, Frédéric, for mentioning. This is not easy. I have three out of the three. So I will tell you about Germany and the level of confidence, which is actually high. A few things to highlight first and foremost. I mean the market probably will be in excess of 110 combined this year, and we’ll do better than that. So again, this is a market phenomenon. And if you look at retail in Europe, to your question, I mean this has been a fairly stable and profitable business and predictable business in the years. And again, what happened in Germany? Well, claims inflation, I talked to that, it’s about 7%. It was exacerbated in Germany because of supply chain issues, but we had anticipated for that. So Germany had increased their price 8% last year. What we had is a spike again in frequency. And the frequency, there is the [indiscernible] normal, if you will, plus in that market, you’ve got discontinued subsidies from the state to foster greater public transportation that has exacerbated the frequency issue. I will also highlight an abnormal, if you look at the past year level of Cat Nat. So there, again, what gives us the comfort we will recover the vast majority of the profit this year. A, is the strength in the boldness of the measure. We have increased double – we have increased our price double digits. 75% of the book is renewed in Jan. So that’s already in the book. Very much like what we’re doing in the UK, we are reducing our underwriting appetite in every channel in that market, which is less profitable, namely direct and brokers. It’s about 10% of this portfolio that we are actually for which we are changing pricing and appetite. And there, again, we are extremely focused on claims. We’re seeing orientation rate picking up 10 points in the course of the last six months. So our agents, our claims handler, everyone is incentivized and focused to drive orientation rate to the highest level. And I must highlight this, this is one of the trademark of Germany. Germany is one of our platform where technology, automation and AI are very advanced. And we are using this to fight very heavily leakage. We’re seeing this through claims cost analyzer, again, recover – predictive recovery tools and fraud. So all of those metrics, I’m not going to get into all the details, but are moving in the right direction. The earned premium with the price increase I talked about, which are unprecedented, have been already passed. And Germany has started to decrease their expense last year. We have tighter expense management. As I said, it’s a land of automation. Today, 70% of the retail policy admin is in straight-through processing. We’re going to continue to scale that, and that’s going to also obviously drive some benefits. So let’s put things in context. Again, businesses that have delivered consistently a shock in the market. We’re doing better than the market from the numbers we’re having, and we’re implementing I would say, unprecedented measures across all the levers to bring back this to the level where we were.

Thomas Buberl: And Andrew, before we go to Scott. Patrick is not alone in this game. He’s being helped by Nancy, who is the Group Chief Underwriting Officer, and who is the brain and motor, I would say, behind the successful reunderwriting of XL Insurance and the successful re-underwriting of AXA XL Re. So they are teaming up and working well on this to make sure that we keep our eyes on the board. Scott? Financial lines?

Scott Gunter: Sure, I’ll answer on that. With respect to the U.S. financial lines, specifically the public D&O book. It's part of our cycle management. So in the few years ago when the market was very, very hard and the prices were up substantially, close to 100%, we obviously grew that portfolio significantly. We almost doubled it in that time frame. And in the current pricing last year, we shrank it. We'll continue to – if we can't get the pricing that we need, we'll continue to shrink it. We're not going to chase the volume at the sacrifice of margin. So to answer your question, in the aggregate, the book will get smaller, so the aggregate contribution to profit will be less, right. But from a technical margin standpoint, we're going to continue to work all the levers on that attachment points, effective use of reinsurance, all that to do our best to maintain that technical margin. And the size will be what the size is, right. So we started on that discipline. It still remains a very profitable business for us. And we do expect over the plan that the rate decreases that you're seeing last year and this year will stop and will start to normalize into some sort of trend. It's just reacting to the big increases from years ago to find its more equilibrium in terms of adequate pricing.

Thomas Buberl: Thank you, Scott. Alban is 2024 challenge and are we behind the starting line, yes or no?

Alban de Mailly Nesle: So Andrew, I see that you have well in mind the two headwinds that I showed earlier, which are the unwind on the discount rate and the positive tax one offs that we had in 2023 that we don't have in 2024. Now, against that, what do we have in 2024? We have several elements. I think the first one is what Patrick has just described for both the UK and Germany. And I don't want to simplify Patrick's job, but Germany is a cash machine and UK health is a cash machine. We had accidents in 2023 that will be repaired in 2024 and we are very confident on that. UK motor, we know is challenging, but we are confident that we are taking the right measures. Just to give you another example, on Germany, most of the retail motor business renews at 1.1 [ph]. At 1.1, we increase prices by 18%. And so you know what the price increase was for the year. And with that, you are confident on the level of profitability that you will have for the full year. So the recovery of those three businesses is the first item. Second, we shouldn't underestimate the impact of the earned rate of 2023 into 2024 in all our businesses. We had significant price increases last year over lost trend in commercial lines in particular. And when I say commercial lines, it's obviously XL, but it's also what we call the GI, which is half of our commercial line business. And we had very good volume and very good rate growth in 2023. And we are starting 2024 with also a very good momentum. Same on the employee benefit. And perhaps Patrick again, or you could say a word or see on employee benefit, generally, irrespective of the UK, to show how we will increase margins. Do you want to do that while I finish the list? And then you – and then the fourth item is the fact that we had a low level of PYDs in 2023 at 1.1 point. And so if need be, there is the possibility to have a bit more PYDs. So those are the four items which make us confident that we will be within the range of 4% to 6% growth of our underlying earnings in 2024.

Thomas Buberl: Patrick, maybe to develop on employee benefits?

Patrick Cohen: Yes, on employee benefits, reasons of improvement going forward. A, we're going to focus on those parts of the business where we get more margin, namely SME. Frédéric talked about it. There's a huge opportunity. The demand is there. The dynamics we're seeing, especially in Europe, but also in emerging markets, given the growing population, shows us that there is potential there to grow and to grow profitably. Typically businesses that go through our tied agents with a strong tied with the SME owner, and we can commend a far greater premium. So that's on the growth front. And then on the technical side, I think I talked to some of that in the UK. So first thing, we are making sure that every business along the lines of what Frédéric said around specialization has the ability to reprice far more quickly than what we used to do. So we're investing to get at the first early size, the ability to price on a month by month basis across all our business. Second, we have some competitive advantage in that market. We're a leader in Europe, in that market. We're a leader, I would say even globally on that market. And we have unique tools. This is a market where scale matters. So your data sets will make ultimately the difference. And given our position where we play across all customer segments, individual large corporates, SME and international private medical insurance, we've got large data sets and we've been able to actually build global pricing models. When we leverage those global pricing models and we implement it in countries like Italy, for instance, we are capable of driving double digit and bottom-line growth. So we are going to scale this. This is part of the scale up. And EB is going to be a scale up play for AXA going forward. The second thing we have is we have through the InsurTech, Frédéric talked about EB partner developed tools that enable us to automate renewal at a level of granularity that we had never done before. So you go faster, you go far more segmented, far more precise, and the impact of this, again, using some of the market, Japan, Mexico, Italy and Spain growing top and bottom-line in the last three years at double digits. So it's proven assets. This enables fundamentally to drive greater retention and to push for price. All of this are things that we're going to scale up across all the entities of AXA.

Thomas Buberl: Let's go to the next question. Let's go to Will.

William Hawkins (NASDAQ: HWKN ): Hi, thank you very much. William Hawkins from KBW. Three questions if I may. First of all, the full year disclosure seems to show a significant fall in the legacy liabilities for XL from 11.4 billion to 6.4 billion. Optically, that seems really helpfully to support your message about derisking the business. But I wondered if you could just talk a little bit more about it. I'm not sure if that change includes an outsized benefit from introducing discounting that you weren't doing back in 2018. It may be that the reserves have gone down, but the sum insured hasn't moved so much just because of the payment pattern. So could you just talk a bit about the change in the legacy liabilities? And should I be as excited as I am that they've gone down so much? Secondly, again, given it caught my ear, Frédéric, when you were talking about the increase in physical distribution networks and you highlighted France and Japan, I wondered if you could talk a little bit more about that. I mean, it's slightly counterintuitive in a tech enabled world that you're adding more bodies rather than fewer. And I wondered if you could just talk a little bit more about the nature of those bodies you'd be adding in terms of demography and skill set and that kind of thing? And then lastly, on the capital management, again, absolutely not criticizing the increase in the dividends, but I'm interested in your thought process about it. Given where your share price is, you could have thought that it would be a better trade to be doubling down on the share buyback rather than increasing the dividend. An adjunct to that, given the stability in your business, did you have any discussion about introducing an interim dividend rather than leaving everything to the full year? Thank you.

Thomas Buberl: Thank you. So, Scott, if you could talk about the first topic, and the news is good news because it is due to claims played, but Scott will go into detail. And then second question, Guillaume Borie and George Stansfield, if you could talk about – Guillaume for France and George for Japan, what are your plans in increasing the distribution networks, and why are you doing this in a world that is getting more and more digital? And then thirdly, on the capital management, I'll take that question. Scott?

Scott Gunter: Sure. I can start. As a reminder for everybody that the slide you're looking at, or the information you're looking at is the 2019 and prior years where a couple of years ago we purchased the ADC. So a step back, we had a lot of conversations around social inflation what's happening on that? Our portfolio of the United States in particular is large accounts. So social inflation, i.e., the big verdicts, hit the largest companies first because that's where the money is. So we saw this phenomenon happening really in 2019 and 2020, and we reacted to it both by putting more money into reserves, but also the purchase of the ADC because our clients were hit earlier than others. The payment patterns that we have in this business, it's a mix. It's some long-tail casualty, but there's also claims made in defense within business occurrence triggers. So we get a bit of a mix. So really the portfolio, what you're seeing is the actual claims paid, being paid out. So over the last three years, a lot of the medium length tails are getting settled.

Thomas Buberl: While the ADC remains…

Scott Gunter: Remains untouched so far.

Thomas Buberl: Guillaume, AXA France distribution?

Guillaume Borie: Good afternoon, everyone. So on the distribution within AXA France, what we see in the current market, at least in France. But I know with Patrick, we very much see the same trends in several of our European markets, is the fact that the winning position is really to combine the strengths of a very good physical distribution network with the power of technology. So we do use technology a lot in order to improve digital customer journeys and provide what we call this omnichannel experience. But if I want to be very concrete, in the end, insurance is still a product that you need to sell. And if you want to sell it properly, in a world where you have more and more compliance requirements, and in a world where most of your customers are basically lost in front of all the changing risk, you do need to have at some point a human advice. This is exactly the strength of AXA France. And when you look at our performance in the past three to four years, we have progressively increased the size of our distribution network, while increasing the investment in the technology to provide our distributors with tools that are increasing their productivity, their ability to understand much more quickly the customer needs, and therefore to provide them with the full range of insurance solutions. Because in the end, our value comes from the fact that we multi equip customers and we are able to give them the full range of solutions. At AXA France, you can find an insurance product for any kind of risk. Second element there also that is critical is that the bulk of our value and of the value of our book in France is related to companies, either because we insure them, we are the insurer of one out of three companies in France, or because we insure the head of the company, who usually has strong need [ph] in terms of individual protection, individual health, and of course, management of his wealth or her wealth. On those elements also, everything is related to the stickiness you have with your distributor. So that's the strategy. How do we execute it? We will further accelerate investment in technology, as mentioned by Frédéric earlier. In particular, in order to increase the average productivity of our distributors and slightly grow the number of tied agents to give you an example, this year we increased the number of physical distributors in France by 3%, and it's leading to concrete growth of the portfolio. So we need to combine both worlds. What we see on the market is that at this stage, you have a limited number of customers that are really ready to go for a full digital experience. Those customers are also customer of AXA, because in France, we are the leading direct insurer with our franchise direct assurance, with today the Number 1 digital player. So there you have a full digital experience, no physical distribution, and we have recorded a very strong growth in 2023. We will continue to grow there, but even being the leader we only have 2% market share with this digital player. So we see that the bulk of the market is still relying, sorry, a lot, on physical distribution, and that's why we believe it's fair to heavily invest in them.

Thomas Buberl: George on Japan.

George Stansfield: So in Japan, physical distribution is still fundamental. We have several channels. We've got somewhat of a unique distribution footprint. The main one is the CCIs, which was the traditional channel of Nippon Dantaï, which we acquired 24 years ago in March of 2000. We also have – so there's 3,900 distributors in the CCIs. The advantage of the CCIs, this is quite unique. They're in every large and small town across Japan. They're tied in to particularly to the smaller SMEs. And so this is quite a unique footprint. In addition, since the acquisition of Nippon Dantaï, we've built two additional channels one is financial advisors, there's 1,200 financial advisors and the third is the broker channel. Neither of those existed at the time. The broker channel we've been highly successful in that. It's been built over the last, I would say eight years. In 2018 to give you a sense of it, the CCIs distributed twice the brokers. Last year, the brokers distributed twice the CCIs. So now we're in a big focus the broker has been highly effective. We're now focusing a lot on the physical distribution and the CCIs, and that's about lowering the average age of the distributors in CCIs and changing some of the incentive structures, which in the past were very traditional, I would say. And we've gotten some good traction on this, but I suspect physical distribution will remain important for the next many years in Japan. We do have a direct business. It's a direct P&C business that's fairly sophisticated. It's not so different than France. The total market of direct players in the motor business in Japan is still very small. We also had a direct life business, which didn't work, and we've merged that in. There's some technology there that we'll use to digitally enable the physical distribution. But the direct life business never took off in Japan. We had it for the past ten years. We've merged it in to AXA Life. So that's the short story on Japan.

Thomas Buberl: Guillaume, on the last question around dividend – interim dividend, what did we discuss? So we discussed everything with our Board, but we mostly listened to our shareholders, in particular the long only shareholders, and their request was clearly going mainly into what is on the table today. To say, look, your business is much more stable now, your business is less volatile, is consistent and we would like to see a higher dividend, but we would also like to see an element of flexibility around the share buyback. And so what you see today is more or less what our shareholders and the long only shareholders wanted. And I think it's a good balance, and that was also the consensus in the boardroom. A good balance between a higher dividend, reflecting that new business model, but keeping flexibility and at the same time being at a payout ratio of 75%, which is well in line with what our competitors are paying.

Thomas Buberl: We go to the other Will.

Dominic O'Mahony: Well, this is Dominic. Three questions, if that's right.

Thomas Buberl: That's right.

Dominic O'Mahony: So the thing that's a little bit novel in the plan is the guarantee maturity business. We've sort of all got used to the idea of general account savings sort of being out of fashion. Could you just give us a little bit of an insight into why you're now placing a bit more emphasis on that business line? Is it the rate environment? Is it sovereignty to reform? Is it just the technology you have available? What's going on? And also, what's the economic profitability in that business? I guess when you put in the asset management side of this, you start thinking maybe sovereignty two reform allows for equity allocations and so on. This could be quite interesting. So any insight you could give on that would be great? Second question, so the SCR growth, so Alvin, you made a point of emphasizing the 4 points headwind per year from SCR growth, I think that's about a €1 billion give or take. And this is going from an environment where you had no SCR growth. I think in the past you talked about P&C growth driving a bit of SCR growth, but Life SCR running off and the net being about zero. And it's quite a big step up in the SCR growth. I'm not saying that's a bad thing. Organic growth, given your ROEs is a great thing to do. I'm wondering why such a large step up in SCR growth and is that really, I mean, are you really giving yourself a bit of a bit of room or actually, is it a substantial feature of the plan? And then third, just detail question. There used to be an explicit policy of 1 billion to 3 billion holdco cash. I haven't seen it in the pack, but I'm wondering whether that's – whether we should sort of put that to one side now, given Alban, you described 4 billion of cash at holdco as being stable as a rule of thumb? Thank you.

Thomas Buberl: Thank you, Dom, for the three questions. So on the guarantee at maturity. Frédéric this should be your question, because you are a big advocate of that business. And secondly, the SCR growth, Albon, if you could talk about it because growth needs investment and capital. And then thirdly, Albon, if you could also talk about the 1.3 billion, obviously, Dom knowing that the old holding company that used to be a pure holding company is now a reinsurance company. Frédéric?

Frédéric de Courtois: So I'll start on maturity guarantee product, then I'll give the word to Guillaume, because France is the biggest market for this product. So the history of life insurance in Europe is that you had two products, annual guarantee products for [indiscernible] in French, but you had the same in other markets and unit linked. And over the past years, especially in France but not only regulators have given space to maturity guarantee product, where the client has a guarantee on its capital at the end of the contract, by the way, it can be 100% or less than that. So we have some product at 100%, mostly in France. We have some product at 80% in Germany. But in between you have no surrender guarantee, if I may say. So this is a product we like very much. And if I look at the hierarchy and we've discussed again with Thomas and the team recently of our products. If I look at solvency requirement or cash or CSM creation, the hierarchy is the same. So the best product is always unit linked. The second best product is always maturity guaranteed product, and the third product is annual guarantee product. There's a bit of a tweak in Hong Kong, but I will not enter into specificities. So we despite higher interest rates we continue to promote unit-linked unique product and maturity guarantee products. And at the end, the clients who trust the brand, who trust AXA, we realize that they don't really care about the annual guarantee or the maturity guarantee, and they very much accept to have a maturity guarantee product. We even transform some existing annual guarantee products into maturity guarantee products. So what you could expect, and then I give the word to Guillaume is that for us, the priorities remain the same, despite higher interest rates. So everything we can on unit-linked and maturity guarantee product. By the way on maturity guarantee product, because we have a competitive advantage with asset managers. You could argue that in unit-linked we are in competition with asset managers on maturity guarantee product. We give to the clients something that asset manager cannot give.

Thomas Buberl: Guillaume?

Guillaume Borie: So maybe first, I will start by reiterating that for us for AXA France savings is a strategic market, clearly and in 2019, so bit less than five years ago, we started this transformation, shifting this traditional capital heavy product into capital light, what we call Eurocroissance. So we provide 100% guarantee after ten years. And meanwhile, you have no guarantee on your surrender. During the first two years, it was more a pilot, and in 2021, we decided to offer the access to this product to our entire customer base. And today, what we see is that it's clearly the blockbuster of our growth in the savings market. What we need to keep in mind is that at least in France, you only sell bundled products. So if you want to sell a unit link, you need to have an offer to couple it with something else. Today, more and more, we couple it only with Eurocroissance and when you look at our performance in 2023, let's be clear we are not overly happy with the growth in unit-linked, but it was a difficult year in terms of market condition. But when you look at the bundle offer Eurocroissance plus unit linked, we grow it by 9%. So clearly, we have found now our customers on that offer, and we will further grow it. What kind of benefits do we expect from it? Good value proposition for the customer and here, honestly, I can only repeat what Frédéric just said. For the customer all in all, for us what we want to offer is a long-term saving solution. And we keep saying, even publicly that if you're interested in a very short-term saving solution, you will not find it. AXA France, so customers, they want a long-term saving solution with us, even for retirement in many cases now. So Eurocroissance is perfectly adapted to that need. Second element that we expect from it is that it's providing us with longer duration and higher margin. Therefore, you will expect to see increase in our CSM stock and progressively increase in our CSM release through this transformation. And I will conclude there as Frédéric mentioned it's both a move on the new business and we accelerated in 2023 and we will continue to do so. And it's also a move on the stock where we are strongly advising customer to move from the traditional Euro to the Eurocroissance offer. And in 2023, it's a move that was really positive in the end and that will help us generate higher earnings and also higher cash from our savings business going forward.

Thomas Buberl: Alban, SCR and cash.

Alban de Mailly Nesle: Yes, And it might well be that I was not clear earlier, it's a 2% SCR growth, which translated to a 4 point solvency hit if you see what I mean. So that 2% SCR growth should be compared to our 5% to 6% top line growth. As such, it's not capital heavy. Does that answer your question? And on the whole core cash, we have 4 billion. We'll remain at 4 billion, but we could be a bit lower that wouldn't be an issue. There's no specific target in particular we don't target to be at 4 billion.

Thomas Buberl: Are there any more questions in the room?

Hadley Cohen: Hi thanks very much. Hadley Cohen, Deutsche Bank (ETR: DBKGn ). Frédéric, I just want to come back on one of your earlier answers when you were talking about the 2-point margin improvement in P&C, a 50 bps coming from expense ratio in half and half of the rest coming between the technical improvements and the improvements in U.K. and Germany. And if I look at the underlying though, your – there's another 50 bps coming from a higher Cat load. So I'm just wondering how easy it is to neutralize the higher Cat load in pricing assumptions and what have you across Europe? And what do you see the risk of political pressures and what have you in that respect? And I guess, how do we get confidence that 50 bps is the river in that number. It's not just going to carry on pushing higher? And then I guess, the counter question to all of that is if I take your new guidance, work that through and what have you and adjust for discount rate versus FI and central attempt to adjust for central cost allocation and what have you, your operating margins in P&C are significantly better than your multiline appears. And I'm just wondering at what point – how do you think about forsaking margin for volume growth? How do you think about that dynamic? At what point do you say margins are good let's focus on growth because it feels like you could potentially be a bit more ambitious on the top line side of things? Thanks.

Thomas Buberl: Frédéric, the two questions are for you. How possible is the 2% or 2.5% cash – combined ratio improvement, if I add the Nat Cat load in it? And then secondly, how would you balance the question around margin improvement versus growth? Are we aggressive enough on growth?

Frédéric de Courtois: Sure. Thank you for the question. So first, I have not been clear enough on the fact that you are right that we need to compensate for the 0.5 addition CAT. So at the end, what – to obtain my two points improvement I need to have, I need to really improve it by 2.5, which is made of my 0.5%. And as I've said, points remaining half and half. The point – and this is a very valid question, is how can we be sure that 4.5% is the right budget for CAT, knowing that these Alban, if I'm correct, we've been at 4.8. So you could argue that it may not be sufficient. The truth is we have more certainty. And we – you remember that a few years ago, we had a 3% CAT budget, and we'll move to 4%, we've moved to 4.5% despite the fact that we've decreased our market share because we've aggressively decreased our CAT exposure at AXA XL Re. So I do not exclude that we increased it again if need be. My point is that we have to be extremely technical and price it well. And this is what we are doing with our internal model. This is what we are doing with our underwriting tool. At the end, CAT is often hidden in other contracts, and we need to make sure that it is explicitly priced by underwriters and our pricing people. We are convinced and looking at the price today and the prices on property CAT are okay today. I would not say they are great, but they are okay. We're absolutely convinced that if we are disciplined, we can make money on these kind of guarantees. Then your second question is also very valid because in insurance, it's hard to have high margins and increase margins and accelerate growth. And I'll start saying that when I discussed about accelerating from 2% to 5%, one part of it was just the fact that we will not have specific exceptional impact as we had over the past years. Another part of it are new initiatives to address white spaces. In other words, nowhere we've asked Patrick, Guillaume and Hassan to push the growth of their existing business. I know that if I push them to increase motor in the Motor business, it will have an impact on my margins. So this is not what we are doing. What we are doing is just to what we've done over the past years because we don't need any more to do it. I mean we've exited the businesses that we wanted to exit and the white spaces on mid-market, for instance, on protecting the energy transition and other white spaces that we have. Is it easy? No. But doing this, we think that we solve the trade-off. In other words, our core business is profitable, it will stay profitable. We just look at this new white spaces that will bring 1% additional growth or it's about €1 billion a year. We have to do it in a disciplined way. We are aware that when we launch a new business in a country, it starts with a higher combined ratio. This is clear. But again, no pressure from us and our business units to say, guys, you have to move to 2% to 5% on your business as usual.

Thomas Buberl: And Hadley, not all geographies have the same growth. I mean if you look – I mean, Hassan was mentioned, maybe Hassan, you can quickly talk about where you put your growth target, which is very different to, for example, what Guillaume and Patrick have as growth.

Hassan El-Shabrawishi: Thank you, Thomas. We have a number of international markets that where we are very selective on where we are. As Thomas mentioned in the beginning, we are – we have leading positions in those markets. And we have the ability to scale by leveraging all the capabilities of the group that Frédéric mentioned in the introduction. So we finally found a very good balance after the transformation that was led by Thomas to be in the right markets and to know how to do it in a profitable way to grow and to give you obviously a few numbers that you already know, I'm sure. We are – the markets that we are in will grow their GDP by tenfolds. Their insurance market is growing by 15-folds in the coming 20 years, and we want to be part of this. Our ambition is to grow beyond market growth. So you could imagine this give us a very high double-digit growth in those markets. Last year has proven that we're able to do it profitably. We've done it in all our markets profitably. And this is extremely good and gives us the ability to focus on unlocking the future as the name of our plan is when it comes to unlocking the potential of those markets. And as Frédéric mentioned, this is part of the white spaces of how are we able to deliver organic growth in a profitable manner in those markets. I come from emerging markets myself. We understand those markets extremely well. We see huge needs driven by strong demographics, strong macroeconomics. And we are able to leverage it with the knowledge that Patrick and his team are giving us, for example, on health and employee benefits, where we're able to leverage those group assets and do it in a complement to the transformation that most of those economies are doing for their health systems. So we're able to really do it at scale today.

Frédéric de Courtois: I do not resist if you comment on these markets.

Hassan El-Shabrawishi: First, because we never discussed them. And we have today. Yes.

Frédéric de Courtois: And we sometimes have questions from investors on, look, this is only 5% of your business. Why do you keep that?

Alban de Mailly Nesle: I'll start saying that this is 5% of our premium and 5% of our earnings, which means that these are profitable markets. We are usually top three, sometimes top five in a limited number of markets. So I see this business as a portfolio of options. And I would say almost three option because I'm making money in these markets. Not all of them may be successful, but in the portfolio theory, I hope that most of them will be. But I think that's interesting that you understand how we've discussed this with our Board, and we've discussed this with our Board in June, and we've made very basic projections on these markets. And we took a 2050 horizon, because we believe that the responsibility of a management team is not only to deliver on the three years plan, but to deliver long term. And we've looked at population projections, GDP projections, insurance market projections, maybe slightly wrong, but overall true and overall right. And we arrived at the projection that these markets that we have represent 5% of the AXA Group today, and they will represent 35% of the AXA Group in 2050. So this is the responsibility of a good management team to have a long-term view. Again, we are not telling you we are going to be successful everywhere. Today, we are profitable in all our markets. They are well managed. We are amongst the market leaders. They are usually the Tier 2 emerging markets, but huge markets. We are confident, and we believe again that it's worth having these markets in our portfolio.

Thomas Buberl: Thank you. Are there any last questions? The last question, David?

Unidentified Analyst: Two questions left, please. The first one on casualty. So you've given some good color on the reserves or covered by the ADC. Give us a little bit of details on what happened since and our development of reserves on a 2021 vintages. And secondly, on XL, so I believe you had a quota-share reinsurance program that you increased last year. Is that at the same level for 2024? And do you have any plans to change it? Thank you.

Thomas Buberl: Scott, if you could take both of David's questions, one on the question around U.S. casualty, reserve development and the other one, what has happened to the quota-share in 2024?

Scott Gunter: Yes. On the – for the U.S. casualty portfolio or the casualty portfolio, the development – and we've been – we look at this all the time because, obviously, it's a significant one. It's actually been in line with our actuarial estimates, right, almost right from – because of that experience we had with the jump in social inflation, we've been pretty comfortable with how it's been progressing, both on the insurance and the reinsurance side. We've been very careful of that. And part of that is also driven by starting in 2020, we significantly reduced our net limits exposed, particularly in the U.S. casualty, where we over half reduced our limits, right? We continue to buy reinsurance on it and drove significant pricing increases. So all that is playing out as we thought it would when we originally obviously set the reserves and everything back in 2021. So no adverse there for us. In terms of the quota-share, sorry, which quota-share are you speaking of on the sorry, on XL on the reinsurance business. On the quota-share, yes, we continue to maintain that quota-share, right? We – it varies pending on the – on how it plays out. But generally speaking, we haven't significantly adjusted. We'll continue to play that obviously going forward in the plan. We have no – when we think about the plan going forward, we haven't significantly changed our view on the reinsurance. We will adjust the dials across all of that depending on the terms and conditions. We can – we have the appetite. We could reduce some of it – so we're not beholden to it, but we'll play that out as we go across.

Thomas Buberl: Excellent. Thank you very much. Thanks, certainly in such a busy earnings season to spend so much time with us for your questions. Thanks to my team for having answered all the questions. And we have spoken about many topics. We haven't spoken about technology and asset management. So if there's any questions left, you can also ask them after the session. Have a great afternoon, evening, and see you soon. Thank you.

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