- Non-direct Property & Casualty (P&C) insurance revenues improved by 5%, with strong growth in AXA Insurance Commercial Lines and Personal Lines Intermediary (+8%) and AXA PPP Healthcare (+6%).
- Overall, UK & Ireland P&C revenues increased 1% to £2 billion, reflecting actions to reduce the risk profile of the Direct motor portfolio.
- The total P&C current year combined ratio is broadly stable at 100.4% (H1 2011: 100.0%), with a slight deterioration reflecting recent flooding claims.
- Total sales on AXA Wealth's 'Elevate' wrap platform increased 11% with total funds on the platform now £4.3 billion, taking AXA Wealth's total funds under management to £20.1 billion (+6% on 31December 2011).
- Architas, the multi-manager investment management business, launched in July 2008, increased funds under management to £10.8 billion (+15% on 31 December 2011).
- Underlying earnings for the first 6 months of 2012 improved by 27% to £66 million (H1 2011: £52 million*).
I am encouraged by the continued improvement in the profitability of the UK and Ireland businesses, and the revenue growth reported in many areas of the business.
The successful repositioning of AXA Commercial Lines has returned the business to growth (+8%) after several years of decline, and has enabled the early re-integration of the AXA Personal Lines' intermediary business. I am very confident this new business unit will progress strongly through an integrated service to brokers.
Likewise, AXA PPP healthcare has continued to deliver strong growth in customer numbers, both in the UK and overseas markets. The lower cost healthcare offer launched following the recent acquisition of Health-on-Line has broadened customer appeal to fuel further growth opportunities.
The profitability of the Direct Motor business, particularly Swiftcover, has been disappointing in recent years. Actions were taken over the first quarter of 2012 to improve the risk profile of the direct motor portfolio, which temporarily depressed both new business and renewal retention levels as the changes were applied. Whilst these efforts have dragged on strong revenue growth elsewhere, this work is now complete, and the direct customer base has returned to growth over the past three months, with new business and retention levels above those seen in 2011.
The months of June and July experienced sustained periods of localised flooding across the UK and Ireland, which is estimated to have cost AXA around £36 million in additional claims. Whilst not on the scale seen in 2007, for those customers impacted it has been no less disastrous and serves as a good reminder of the role insurers play in helping to protect society from the financial burden of such events. It also highlights the urgent need to conclude with Government a sustainable model for affordable flood insurance ahead of the end of the Statement of Principles in July 2013.
I am confident that AXA UK & Ireland has the right strategies and is organised to achieve the full potential of the markets in which it competes. I am looking forward to our continued progress in the second half of the year.