AXA is making waves in the financial sector by proposing a 9% higher dividend and a substantial share buyback plan of up to 1.2 billion euros. This ambitious move comes after the French insurance giant successfully implemented a three-year insurance strategy that has resulted in remarkable growth across all business lines and geographies, leading to record revenue in the full-year 2024. The company reported a staggering 7% year-over-year increase in total gross written premiums and other income, amounting to 110.32 billion euros for the twelve months ending December 31, 2024.
This impressive topline performance was bolstered by AXA's strategic focus on disciplined pricing and an acceleration in volume growth, surpassing the FactSet consensus estimate of 108.75 billion euros in sales. In terms of profitability, AXA's net income saw an upswing to 7.89 billion euros, compared to 7.19 billion euros the previous year, slightly exceeding analysts' expectations of 7.87 billion euros.
According to CEO Thomas Buberl, "Group underlying earnings reached 8.1 billion euros, reflecting both higher topline growth and excellent margins." He emphasized that AXA has successfully improved short-term profitability in its property and casualty segments, particularly in Retail and UK Health, while maintaining robust margins in P&C Commercial lines, even with limited effects from natural catastrophes. The positive outcomes are attributed to improving trends in Life insurance, as the company continues to invest in technology to drive long-term growth.
AXA also highlighted its strong balance sheet, reporting over 7 billion euros generated in cash. However, it should be noted that the solvency II ratio experienced a decline of 11 points year over year to 216%, largely influenced by adverse financial market conditions, including the widening of government spreads and the negative ramifications of net subordinated debt redemption. Philanthropically, the board has put forward a dividend proposal of 2.15 euros per share, an increase from last year's 1.98 euros.
In conjunction with its proposed annual share buyback program, AXA anticipates returning 3.8 billion euros to its shareholders through a share repurchase plan linked to the anticipated divestment of AXA Investment Manager to BNP Paribas. Looking ahead, AXA is on track to achieve its principal financial objectives outlined in the strategic plan for 2024-2026, dubbed "Unlock the Future," which aims for a compound annual growth rate of 6% to 8% in underlying earnings per share by 2026. However, it's worth noting that the stock saw a minor decline of 1% during Thursday's midmorning trading session..