Transaction may result in a lower in underlying earnings
Underneath this settlement, ARVF will assume reinsurance for about €12 billion of AXA France Vie’s financial savings reserves. This contains €10 billion allotted to conventional basic 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. Nonetheless, 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 start following the publication of the group’s full-year outcomes for 2023 and its new strategic plan.
The transaction can also be anticipated to have a negligible one-time impact on AXA Group’s web revenue. Moreover, it’s anticipated to lead to a lower of roughly €0.4 billion in AXA Group’s web contractual service margin from 2024 onwards.
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