Axa : The Covid-19 crisis could have repercussions on the 2020 results

  •   07/05/2020 - 10h41
  •   DEHOUI Lionel

Last Tuesday, the company Axa announced that the coronavirus health crisis could have an impact on its activities for the financial year 2020 (like all companies besides). The company has indicated that it has recorded a reduced number of Covid-19-related casualties in March 2020. In this current context marked by the coronavirus health crisis, the Axa group has seen its solvency ratio decline. The latter was down 182 per cent at the end of March 2020, down 16 points from 2019. In addition, its debt ratio is below 28% after the debt settlement in April.

Trade Axa shares now!
80.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Axa : The Covid-19 crisis could have repercussions on the 2020 results
Image copyright: Laurent Grassin - Flickr

The decline in sales in the first quarter

The Axa Group, the leader in Europe and worldwide in the insurance sector, recorded a drop in turnover in the first quarter of the year. That's right! The latter fell by 9% on a reported basis, but rose by 4% on a like-for-like basis to 31.7 billion euros. This was due to increased business in all lines of the insurance sector worldwide and in particular to exceptional pricing.

March alone shows a decline in turnover that is not far from 5% compared to last year. Moreover, the first results of last month envisage a decrease of almost 12%. This reduction concerns most of the different regions of the world compared to April last year.

 

The Director-General's statement

The managing director of the Axa group, Thomas Bubel, says that claims in connection with the coronavirus crisis in March are limited. In addition, the effects of the health crisis are not yet well situated. But he adds that the crisis will have a negative impact on the global insurer's results for the year 2020.

Indeed, the group says that restrictive measures adopted by governments around the world will necessarily affect business. The restrictive measures will have a progressive impact on the group's sales and revenues over the course of the year.

 

Other information

According to an initial forecast by the insurer, the losses related to the coronavirus health crisis and the cancelled events will be very large. A loss of several hundred million euros before and after taxes is envisaged by the company. However, it is too early to publish a loss forecast for operating losses over the year.

Reminder: Axa is a French group created in 1985 which operates in the insurance sector. The group is the world leader in insurance and its main activity is financial protection, such as life insurance, asset management and non-life insurance.