France's AXA, Europe's second-biggest insurer, has today reported slightly lower-than-expected yearly earnings, as higher debt servicing costs and investments in tech ate into a rise in revenues.
The group also pledged bigger shareholder payouts as part of a new three-year strategic plan that it is set to unveil today.
It said full-year 2023 underlying earnings rose by 5% from a year earlier to €7.6 billion. That was in line with AXA's own guidance, but below the €7.69 billion analyst consensus compiled by the company.
Gross premiums and other revenues over the period rose 1% to €102.7 billion, also missing the €103 billion analyst average estimate, hit by the removal of two global clients in France and lower sales at its asset management arm.
AXA's solvency II ratio - a measure of insurers' capital strength under European Union rules - stood at 227%, up 12 percentage points from a year earlier, the Paris-based firm said in a statement, driven by strong operating returns.
"The lower-than-expected earnings mainly stem from two reasons: our debt which is a little more expensive because of the rise in rates and secondly the fact that we have increased investments in technology," AXA's chief financial officer Alban de Mailly Nesle told reporters in a call.
The group, led by Thomas Buberl since 2016, also announced what it called a "capital management policy" as part of its new strategic plan. It promises to pay shareholders up to 75% of earnings in cash, including a dividend payout ratio of 60%.
The new policy translates into a yearly dividend for 2023 of €1.98 per share, up 16% from 2022.
In total, AXA will return up to €6 billion to shareholders in 2024, divided between €4.4 billion in dividends and up to €1.6 billion in share buybacks.
The dividend payout policy under AXA's previous three-year plan was in the range between 55 and 65%.
