AXA France enters reinsurance settlement for in-force financial savings portfolio

AXA Group has disclosed that its affiliate, AXA France Vie, has finalized a reinsurance settlement with AXA Réassurance Vie France (ARVF). ARVF is a reinsurance entity collectively owned by AXA Assurances Vie Mutuelle and AXA Assurances IARD Mutuelle.

Beneath this settlement, ARVF will assume reinsurance for roughly €12 billion of AXA France Vie’s financial savings reserves. This contains €10 billion allotted to conventional normal account (G/A) financial savings.

The deal is projected to facilitate a money switch of €0.6 billion to AXA S.A. and is anticipated to boost the AXA Group’s Solvency II ratio by roughly two factors as of December 31, 2023. Nevertheless, the transaction may result in a lower in underlying earnings by about €50 million yearly ranging from 2024.

In response to the anticipated earnings discount, AXA plans to provoke a share buyback program, estimated at round €0.5 billion. This buyback is scheduled to begin following the publication of the group’s full-year outcomes for 2023 and its new strategic plan.

The transaction can be anticipated to have a negligible one-time impact on AXA Group’s internet earnings. Moreover, it’s anticipated to lead to a lower of roughly €0.4 billion in AXA Group’s internet contractual service margin from 2024 onwards.

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