Bad weather knocks insurance giant's earnings

UK insurance giant Axa today revealed that the June floods and storms at the start of the year knocked a third off interim earnings at its UK insurance arm.

The group forked out £78m (€125m) for the first set of floods, which when combined with a £37m (€55m) bill for January storm claims, saw total UK insurance underlying earnings drop to £83m (€122m).

Axa expects the July floods to cost it a further £120m (€177m) and said it was likely premiums would have to rise as a result.

Life and savings new business surged 26% ahead to £553m (€816m) on a like-for-like basis, thanks largely to a strong performance from Winterthur’s wealth management arm and Axa individual pensions, as well as better-than-expected demand for offshore bonds.

Nicolas Moreau, group chief executive of Axa UK, said the “destructive floods” seen in June had failed to derail underlying earnings growth.

But Axa was unable to give guidance on the impact of the July floods on full year earnings.

Axa said its health insurance operation had been given a fillip by a private medical cover tie-up with Tesco, announced last summer.

Paris-headquartered Axa reported total group-wide underlying earnings across all markets up 19% to €2.7bn for the six months.

Axa has operations across 11 main countries, including businesses outside of Europe, in the US, Japan, Australia and New Zealand.