AXA Group achieves record profits in 2025; property and casualty business profit margin and investment returns remain strong

AXA Group (EPA:AXAF) announced on Thursday that its full-year 2025 basic earnings reached €8.4 billion, a new record, up 6% at constant exchange rates. Strong underwriting profit margins and higher investment income offset the impact of narrower claims reserves buffers and a €341 million reduction in prior reserve releases.

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This performance excludes AXA Investment Managers, which was sold to BNP Paribas on July 1. Based on this, basic earnings grew 9%.

Earnings per share increased 8% to €3.86, but this figure was dragged down by a 2 percentage point impact from the euro’s depreciation against the dollar and a 1 percentage point dilution from the timing of a €3.8 billion anti-dilution share buyback related to the sale of AXA Investment Managers. The share buyback contributed 3 percentage points to EPS growth.

Net profit surged 26% to €9.8 billion, benefiting from a €2.2 billion capital gain from the sale of AXA Investment Managers.

AXA’s property and casualty insurance gross written premiums reached €58 billion, up 5%, with a full-year combined ratio of 90.6%, improving 0.3 percentage points.

Natural disaster losses accounted for 3.4% of premiums, below the group’s normalized level of about 4.5%.

Despite favorable conditions, prior reserve development declined from -1.6% in 2024 to -1.1%, reducing earnings by €341 million. The undiscounted net claims reserve ratio fell from 180% of net earned premiums a year ago to 175%.

CEO Thomas Buberl stated that the group “leveraged these excellent results to further strengthen reserve prudence,” seemingly preemptively addressing concerns about the declining buffers.

Property and casualty basic earnings grew 9% to €5.87 billion, driven by €292 million from increased business volume, €189 million from improved profit margins, and €435 million from higher investment income, offset partly by €235 million in increased insurance financing costs and €169 million in higher taxes.

Life and health insurance basic earnings rose 7% to €3.5 billion. Life insurance profit increased 4% to €2.72 billion, while health insurance soared 17% to €787 million, absorbing a €100 million adverse impact from legislative changes in Mexico’s VAT recoverability.

Total gross written premiums for life and health insurance increased 8% to €56.5 billion. Net inflows improved significantly from €1.5 billion in 2024 to €5.4 billion, driven by €4.9 billion in protection products and €2.7 billion in health insurance, partly offset by outflows of €5 billion from traditional savings accounts.

Year-end contract service margin was €33 billion, below €33.6 billion, with normalized contract service margin growing 2%. Currency fluctuations (mainly yen and Hong Kong dollar depreciation) reduced the contract service margin by €1.4 billion.

As of December 31, 2025, the Solvency II ratio was 224%, up 9 percentage points year-over-year. The ratio fell to 215% on January 1 due to €2.4 billion of grandfathered subordinated debt no longer qualifying as eligible capital. AXA estimates that the Solvency II regulatory revisions expected in Q1 2027 will increase the ratio by 17 percentage points.

Shareholders’ equity declined from €49.9 billion to €47.2 billion, impacted by €4.6 billion in dividends, €4.7 billion in share buybacks executed in 2025, and €3.5 billion in adverse foreign exchange effects.

AXA proposed an €2.32 per share dividend, up 8%, and launched a new annual share buyback program of up to €1.25 billion. The group expects 2026 basic EPS growth to be at the upper end of the 6% to 8% target range. The debt leverage ratio increased from 20.6% to 22.3%, within the group’s planned range of 19% to 23%.