AXA Australia's 47 per cent op earnings reversal
AXA Australia's operating earnings for the six months to June 30 this year were down 47 per cent on the back of what AXA Asia Pacific chief executive Andrew Penn described as $20 million of capitalised loss reversals in financial protection, as well as the impact of falling funds under management.
The final result was operating earnings of $75 million for the six months to June 30, 2009, down 47 per cent on the comparative period in 2008.
The results for the group’s wealth management, financial protection and mature business divisions were all down, with wealth management down by 56 per cent to $17.3 million, financial protection down 44 per cent to $36.9 million and mature business down 43 per cent to $20.8 million.
The Australian group’s funds under management, administration and advice was down 11 per cent to $54.63 billion.
Total advice gross inflows were up 66 per cent to $1.01 billion due to the inclusion of Genesys sourced inflows, the group said. Net flows were negative $(0.3) million, compared to $62.1 million for the same period in 2008, but with positive net flows in the second quarter.
The group said despite the “extremely challenging” market and economic conditions of the first half of this year, there were some positive signs from the share market in the second quarter of 2009, reflected in a change of investor preference from cash back towards other wealth management products.
AXA net flows were down 89 per cent to $182.7 million, while inflows were down 30 per cent to $3.69 billion.
Gross inflows into AXA superannuation and pension products were up 2 per cent to $1.92 billion due to the inclusion of Genesys and strong North flows offsetting lower discretionary flows into other superannuation and pension products, the group said. Net inflows were up 25 per cent to $324.7 million.
Wealth management business ipac Asia was particularly affected by the global financial crisis, the group said, incurring a loss of $5.7 million, on the back of a loss of $2.8 million for the same period in 2008.
AllianceBernstein’s results were hit by the termination of a number of client mandates and the restructuring of existing client mandates, with gross inflows down 56 per cent to $1.62 billion and net flows down $9 billion to negative $(8.74) billion.
On the insurance side of the business, new business was up 23 per cent to $58.8 million, but the value of new business was down 9 per cent to $63.7 million.
Individual life new business was up 19 per cent to $32.2 million due to product and service improvements and growth in new policies sold, the group said. Individual income protection new business was up 19 per cent to $14.5 million, and group risk new business was up 39 per cent to $12.1 million.
The broader AXA Asia Pacific group reported a fall in profit after tax (before investment experience) of 18 per cent to $267 million, while group operating earnings for the six months were also down 13 per cent to $255.5 million.
Penn said the significance of the market falls could be seen in the reduction of the group’s average funds under management and advice, which was down 26 per cent on the same period last year.
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