Full Year 2011 Earnings

Transcription

1 Full Year 2011 Earnings February 16, 2012 Presentation

2 Cautionary note concerning forward-looking statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to the section Cautionary statements in page 2 of AXA s Document de Référence for the year ended December 31, 2010, for a description of certain important factors, risks and uncertainties that may affect AXA s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. 2 AXA Earnings February 16, 2012

3 Table of contents 2011 key highlights Page 4 by Henri de Castries, Chairman and CEO 2011 financial performance Page 14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Business overview Page 48 by Mark Pearson, President & CEO of US operations Véronique Weill, Group COO Concluding remarks Page 62 by Henri de Castries, Chairman and CEO 3 AXA Earnings February 16, 2012

4 Resilient business model Underlying Earnings pre-tax Underlying Earnings 1 In Euro billion +2% 46% Property & Casualty and International +14% G/A Protection & Health +8% 34% 20% Savings and Asset Management 2-18% +5% on a reported basis Earnings growth supported by less financial marketsensitive businesses Change is at constant Forex 4 AXA Earnings February 16, 2012 Changes are at constant Forex and restated for the partial sale of UK Life operations and the AXA APH transaction 1. Excluding Holdings 2. Including G/A Savings, Unit-Linked and Banking

5 Strong operating Free Cash Flow generation and robust Balance Sheet In Euro billion Operating Free Cash Flows 1 up 14% Solvency I ratio close to historical highs 182% 188% 2 Remittance ratio from entities up to 76% Reduced debt gearing Economic solvency ratio at comfortable level 28% 26% 178% 148% >150% January, 31, AXA Earnings February 16, 2012 All notes are on page 65 of this document

6 Dividend maintained at Euro 0.69 per share In Euro per share Dividend maintained Resilient business model Strong operating Free Cash Flows Robust balance sheet Dividend yield of 7% based on share price as at 31/12/2011 Payout ratio 1 of 49% 6 AXA Earnings February 16, 2012 All notes are on page 65 of this document

7 Ambition AXA Well suited to the challenges of the current environment Mature markets Sustainable growth in earnings & operating Free Cash Flows High growth markets Double our size organically Selectivity Acceleration Efficiency Everywhere with a focus on mature markets Financial performance impacted by market conditions Delivering on operational initiatives 7 AXA Earnings February 16, 2012

8 Ambition AXA Financial performance impacted by market conditions In Euro per share Underlying Earnings per share In Euro billion Group operating Free Cash Flows % 1.57 Ambition AXA CAGR +10% % 4.2 Ambition AXA cumulative Euro 24 billion Published Restated for discontinued Canadian operations Adjusted return on equity Debt gearing 11.5% -1.5 pts 10.0% Of which -1.4 pts due to increase in impairments 15% 28% 26% 25% Ambition AXA 2015E Ambition AXA 2015E Changes are on a reported basis 8 AXA Earnings February 16, 2012

9 Delivering on operational initiatives 1. Improved business profitability G/A Protection & Health Unit-Linked G/A Savings Reshaping the L&S business APE growth +13% -3% -20% NBV margin 47% 23% -4% Current year combined ratio Combined ratio Fostering P&C profitability 102.6% -2.9 pts 99.6% 99.5% 97.9% -1.4 pts Improving net flows in Asset Management 9 AXA Earnings February 16, 2012 In Euro billion AXA IM Changes are on a comparable basis 1 All notes are on page 65 of this document AllianceBernstein

10 Delivering on operational initiatives 2. Active capital management Disposals of mature entities and non-strategic participations Acquisitions in high growth markets Asia Life minority interests buyout Australia & New Zealand Euro 1.3 billion Euro 3.2 billion 16% stake in Taikang Life Euro 0.9 billion Proceeds: Euro 4.1 billion Euro 0.9 billion Canada Euro 1.9 billion Debt gearing down to 26% in 2011 Deleveraging 10 AXA Earnings February 16, 2012

11 Delivering on operational initiatives 3. Acceleration of profitable growth in selected areas Asia Life minority buyout Simplification of governance Integration of Life and P&C businesses Leverage Group transversal capabilities Asia Life growing in line with expectations Asia Life 23% APE growth Asia Life +16% L&S NBV Total: Euro 1.4 billion Increased contribution from high growth markets and Direct in P&C P&C revenues Total: Euro 27 billion High growth markets 12% Direct 8% 3.3bn 2.1bn Revenues growth +16% Revenues growth +8% 11 AXA Earnings February 16, 2012 Changes are on a comparable basis

12 Delivering on operational initiatives 4. Cost savings plan in mature markets is on track Ambition AXA 0.3 billion savings achieved in 2011 In Euro billion In Euro billion Maintain P&C and L&S administrative costs E- 2013E 2014E- 2015E Total administrative cost savings In Euro billion 0.3 Reduce P&C acquisition expense ratio by 1.5 pts E- 2013E E- 2015E 0.4 P&C Acquisition cost savings 2011 achievement 2012E- 2015E E 12 AXA Earnings February 16, 2012

13 Table of contents 2011 key highlights Page 4 by Henri de Castries, Chairman and CEO 2011 financial performance Page 14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Business overview Page 48 by Mark Pearson, President & CEO of US operations Véronique Weill, Group COO Concluding remarks Page 62 by Henri de Castries, Chairman and CEO 13 AXA Earnings February 16, 2012

14 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 14 AXA Earnings February 16, 2012

15 Underlying Earnings (1/2) Underlying Earnings Underlying Earnings by segment In Euro million In Euro million Reported basis Constant Forex +2% 3,731 3,901 Life & Savings Property & Casualty 2,445 1,553 2,267 1,848-7% +19% -9% +16% Asset Management % +20% International Insurance % -6% Banking % +256% Holdings (836) (843) -1% -1% Change is at constant Forex Underlying Earnings 3,731 3,901 +5% +2% 15 AXA Earnings February 16, 2012

16 Underlying Earnings (2/2) In Euro million Of which -215m on US GMxB 3, ,901 technical margin , % published Canadian Underlying Earnings restated for sold Canadian operations Life & Savings scope effects from UK and AXA APH Life & Savings P&C, International Asset Management, Banking Holdings Forex & other 16 AXA Earnings February 16, 2012 Change is at constant Forex

17 Adjusted Earnings Adjusted Earnings Details on Adjusted Earnings In Euro million In Euro million -15% Underlying Earnings 3,731 3,901 4,150 3,589 Net realized capital gains/losses Realized capital gains/losses (312) 682 Impairments (377) (840) o/w equities (169) (308) ROE % 10.0% o/w fixed income (166) (424) o/w other (43) (107) Hedging of equity portfolio (104) (154) Adjusted Earnings 4,150 3,589 Of which -387m on Greek government bonds Adjusted Earnings mainly impacted by higher impairments, notably on Greek government bonds 17 AXA Earnings February 16, 2012 Change is at constant Forex All notes are on page 65 of this document

18 Net Income Net Income Details on Net Income In Euro million In Euro million Adjusted Earnings 4,150 3,589 2, % 4,324 Change in fair value of assets Goodwill and related intangibles (81) (1,167) Restructuring and integration costs A (76) (281) Exceptional operations B (1,456) 2,069 Of which -943m goodwill reduction attributable to US Accumulator Variable Annuity book of business Net Income 2,749 4,324 Change is at constant Forex A. Restructuring and integration costs: Change in incentive compensation program at AllianceBernstein Other restructuring and integration costs B. Exceptional operations: o/w exceptional realized capital gains on: Sale of Australian & New Zealand operations 1 Sale of 15.6% stake in Taikang Life Sale of Canadian operations o/w other: Net Income of Canadian operations AXA Bank Hungary losses (impact of legislation and discontinuation of lending activities) -0.1bn -0.1bn +0.6bn +0.8bn +0.9bn +0.1bn -0.2bn 18 AXA Earnings February 16, 2012 All notes are on page 65 of this document

19 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 19 AXA Earnings February 16, 2012

20 L&S New business sales and margins by markets In Euro million Mature markets High growth markets 1 Total New business sales (APE) -1% 5,114 4,808 +2% o/w Asia up 16% o/w CEE down 23% = 667-1% 5,780 5,733 New business margin 20% 22% + 38% 42% = 22% 25% 20 AXA Earnings February 16, 2012 Changes are on a comparable basis All notes are on page 65 of this document

21 L&S New business sales and margins by business Continued improvement in business mix NBV margin (%) APE (Euro million) % change G/A Protection & Health 47% 47% 1,802 2, % Strong sales in the US (new Indexed Universal Life product), France (success of Group Protection), Switzerland (Group Life) and Germany (favorable change in regulation) G/A Savings -1% -4% 1,437 1,155-20% Discipline in a low profitability environment, mainly in France, Italy and Belgium Unit-Linked 23% 23% 1,792 1,809-3% Strong performance in Italy, France, the US and South-East Asia offset by the UK and Germany Mutual funds & Other 5% 5% % Strong performance of Elevate platform in the UK (+75%), partly offset by lower pension fund sales in CEE Total 22% 25% 5,780 5,733-1% 21 AXA Earnings February 16, 2012 Changes are on a comparable basis

22 L&S New business margin rollforward Increase in new business margin despite financial market impact 2011 drivers of change Going forward Improved mix toward Protection & Health Higher contribution from high growth markets Mainly lower interest rates impact on G/A Savings products with guarantees Continue to improve business mix Additional organic capital investment E: +2bn on Protection & Health +2.0 pts -1.8 pts +1bn 0bn on Unit-Linked on G/A Savings +1.9 pts 25.2% 22.3% +0.7 pt Ongoing G/A Savings products redesign Hybrid products sold with a UL share Products sold to attract higher margin UL business Country mix Business mix Scope Market Impact & other Pure G/A products Most products sold without guarantee or with a 1-year guarantee 22 AXA Earnings February 16, 2012

23 L&S Underlying Earnings -2% 1 o/w -191m from the UK o/w +50m from AXA APH 2, ,304 Mainly increase in average asset base Mainly increase in average asset base and improved mix o/w -111m in France, mainly changes in regulation o/w -64m in Japan, mainly due to the impact of the Great East earthquake ,267 Scope excluding scope effects US contribution Investment margin UL fees & margin on revenues Technical margin Expenses Tax, Forex & Other 1. Change is on a constant Forex and restated for the partial sale of UK Life operations and the AXA APH transaction 23 AXA Earnings February 16, 2012 Full detail in appendix on pages 12 to 17

24 L&S Pre-tax Underlying Earnings by business G/A Protection & Health In Euro million G/A Savings In Euro million Unit-Linked excl. US Variable Annuities GMxB US Variable Annuities GMxB In Euro million +8% In Euro million 2,065 2, % % Excluding the UK sold operations Excluding the UK sold operations Excluding the UK sold operations -383 Growth in new business and inforce book +5% excluding favourable claims experience in Switzerland Increase in average assets and improved business mix Decrease in hedging result and reserve strengthening on change in lapse assumptions Changes are on a constant Forex and restated for the partial sale of UK Life operations and the AXA APH transaction 24 AXA Earnings February 16, 2012 Full detail in appendix on pages 18 to 22

25 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 25 AXA Earnings February 16, 2012

26 P&C Revenues by segment Total Personal lines In Euro million +3.6% 25, % 27,046 16,073 16,309 Average price increase of +4.8% Increase in volumes more than offset by lower average premium Commercial lines +3.3% 9,714 10,535 Average price increase of +2.3% More favorable business mix 26 AXA Earnings February 16, 2012 Changes are on a comparable basis

27 P&C Price increases by country and segment Personal lines Price increase Revenues growth Commercial lines Price increase Revenues growth 2012 market pricing trends France +4.1% +0.1% +5.2% +2.8% Germany +1.1% +6.3% +0.2% +0.9% UK & Ireland +9.8% +1.2% +4.2% +5.2% Switzerland -0.4% +1.9% -0.4% -0.9% Belgium +4.4% +2.1% +1.2% +1.9% MedLA +3.0% +4.7% +1.6% +6.8% Price increases expected in both Personal and Commercial lines Acceleration of market price increases in Motor Price increases driven by continuing bodily injury claims inflation Commercial lines remain very competitive Trends likely to continue Prices to increase in Household since market experienced heavy nat cat losses over the last years Stable trends expected in Italy as well as in Spain in Personal Lines Direct +12.0% +8.2% Total +4.8% +3.6% +2.3% +3.3% Prices expected to be stable Prices expected to increase Price increase expected to accelerate vs. price increase 27 AXA Earnings February 16, 2012

28 P&C Revenues and margins by market Improved current year combined ratio with strong sales in Direct and high growth markets In Euro million Mature markets High growth markets 1 Direct Total +3.5% +1.3% Revenues 21,067 21, = +15.7% +8.2% 25,896 27,046 2,990 3,335 1,928 2,102 Current year combined ratio -4.2 pts -3.3 pts +0.4 pt + + = 106.0% 102.7% 99.3% 99.7% 100.0% 101.7% -2.9 pts 102.6% 99.6% 28 AXA Earnings February 16, 2012 Changes are on a comparable basis All notes are on page 65 of this document

29 P&C Underlying Earnings Improved combined ratio P&C Underlying Earnings Combined ratio In Euro million +16% -2.9 pts + Price increases + Lower Nat Cat costs + Cost savings + Lower frequency Increase in severity - 1,553 1, % 1.7% 100.9% 99.6% 0.7% 98.9% -3.1% -1.7% 99.5% 97.9% Natural Catastrophes Improved current year combined ratio lower prior year reserve developments All-year combined ratio Investment income Stable investment income at Euro 2.0 billion Asset yield down 1 bp to 4.0% Changes are at constant Forex 29 AXA Earnings February 16, 2012 Full detail in appendix on pages 25 to 28

30 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 30 AXA Earnings February 16, 2012

31 AM Assets under management and revenues In Euro billion Average AUM In Euro billion Net outflows 863-2% 836 AXA IM Euro -1 billion Split by expertise 269 AXA Rosenberg +4 (5) Other expertises In Euro billion Revenues 0% AllianceBernstein Euro -28 billion Split by product strategy Equity Fixed Income Alternatives & other (54) 31 AXA Earnings February 16, 2012 Changes are on a comparable basis

32 AM Underlying Earnings Underlying Earnings AXA IM In Euro million % % 215 Non repeat of 2010 Rosenberg coding error provision and higher revenues AllianceBernstein -23% Decrease mainly due to lower revenues reflecting lower average assets under management 32 AXA Earnings February 16, 2012 Changes are at constant Forex

33 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 33 AXA Earnings February 16, 2012

34 Shareholders equity In Euro billion Shareholders equity Key drivers of change vs. + Net income for the period +4.3 billion Forex movements net of +0.5 billion + hedging instruments - Goodwill deduction related to AXA APH transaction -2.5 billion dividend -1.6 billion FY09 - Decrease in net unrealized capital gains billion - Change in pension deficits -0.6 billion 34 AXA Earnings February 16, 2012 All notes are on page 65 of this document

35 Solvency I Solvency I ratio at 188% 186% 154% 127% 171% 182% +17 pts -7 pts -4 pts 188% Of which: +3 pts on fixed income assets -8 pts on equity FY06 FY07 FY08 FY09 Underlying Earnings Dividend Market effects & Other Solvency I Sensitivities In Euro billion Ratio as of December 31, % Interest rate +100bps 148% Surplus Interest rate -100bps 250% Equity markets +25% 199% Requirement Equity markets -25% 181% Corporate spreads +75 bps 173% On fixed income assets, the combination of sensitivity impacts from interest rates decrease and widening corporate spreads is capped at -40 pts of solvency 35 AXA Earnings February 16, 2012

36 Economic solvency Economic solvency 1 Main risk drivers In Euro billion vs. 178% % 38.9 >150% - - Credit and government bond spreads, net of liquidity premium Interest rates -15 pts -20 pts Sensitivities Ratio as of December 31, 2011 Interest rate +100bps 148% 165% December 31, 2010 Available capital Required capital December 31, 2011 January 31, 2012 Economic solvency ratio Interest rate -100 bps Equity markets +25% Equity markets -25% 123% 155% 141% Corporate spreads +75 bps 130% 36 AXA Earnings February 16, 2012 All notes are on page 65 of this document

37 Improved debt gearing at 26% In Euro billion Net financial debt Debt ratios Dividends from entities net of financing costs and dividends to shareholders Net cash proceeds from disposals / acquisitions Debt Gearing 2 28% 26% Interest Cover 3 8.5x 9.1x Debt gearing down 2 points vs. : point from disposals/acquisitions -1 point from dividends from entities net of financing costs and dividends to shareholders Undated subordinated debt Subordinated debt 1 Senior debt (including CP) Cash 37 AXA Earnings February 16, 2012 All notes are on page 65 of this document

38 General Account invested assets Invested assets (100%) In Euro billion % % Changes in asset allocation Fixed income % % o/w Govies and related % % o/w Corporate bonds % % o/w Asset backed securities 9 2% 8 2% o/w Mortgage loans & other % 22 5% Cash 21 5% 29 6% Listed equities 18 4% 14 3% Real Estate 21 5% 22 5% Alternative Investments % 13 3% Net inflows and investment income: invested mainly in fixed income Mark to market: government bonds assets benefiting from interest rates decrease while market value of equity decreases Forex: depreciation of the Euro mainly against CHF and JPY Scope effect: Euro - 3 billion related to the sale of the Canadian operations, mainly govies and corporate bonds Policy loans 6 1% 6 1% Total Insurance Invested Assets % % 1. Mortgage loans & other include individual mortgage and loans held by the insurance companies of the Group (Euro 13 billion, mostly in Germany and Switzerland participating funds) and Agency Pools (Euro 2 billion) 2. Mainly Private Equity and Hedge Funds 3. invested assets referenced in page 57 of the financial supplement are Euro 639 billion including notably Euro 134 billion of Unit-linked contracts, Euro 34 billion related to the banking segment (of which Euro 20 billion mortgage & other loans) 38 AXA Earnings February 16, 2012

39 Focus on net unrealized capital gains In Euro billion Balance sheet net unrealized capital gains Equities Corporate bonds Government bonds In Euro billion 2.9 Off balance sheet net unrealized capital gains 3.2 Real estate and loans 2 Net unrealized capital gains on Government bonds by issuer Eurozone peripheral countries 0.6 France Germany Belgium Switzerland Japan US -0.7 Other (mainly Netherlands and Austria) 39 AXA Earnings February 16, 2012 All notes are on page 65 of this document

40 Focus on exposure to Eurozone peripheral countries government bonds Exposure to Eurozone peripheral countries Exposure by issuer Domestic vs. non domestic AFS OCI in Euro billion Gross Book value Gross market value Dec. 31, 2011 GMV in % of BV Net 1 unrealized gains/losses Gross market value Jan. 31, 2012 Italy % Spain % Portugal % Domestic 45% 55% Non domestic Ireland % Greece Or 12.3bn with AXA MPS JV at Group share 77% of non domestic exposure located in AXA s French, German and Belgian entities Greek government bond impairment of Euro 387 million Euro 92 million in 1H11 based on mark to market of maturities 2020 Euro 295 million in 2H11 based on mark to market of all maturities Corresponds to 78% haircut 40 AXA Earnings February 16, Net of tax and policyholder participation, after impairment

41 Non domestic exposure at AXA France, AXA Belgium and AXA Germany for L&S entities Total gross unrealized capital gains 1 In % of G/A reserves 1 6.4% Vs. Exposure to Eurozone peripheral countries sovereign debt 1 In % of G/A reserves 1 5.5% Reinvestment rate vs. guaranteed rate 1 Current investment yield 1 4.4% 3.9% 190bps 2.0% Reinvestment yield on fixed income assets Inforce guaranteed rate Flexibility to absorb potential losses 41 AXA Earnings February 16, For AXA France, AXA Germany and AXA Belgium

42 Asset & Liability Management Investment policy investment margin sustainability Investment margin Sustainable investment margin 76 bps 73 bps 2011 L&S Reinvestment rate on Fixed income assets Eurozone 3.9% US 3.0% Japan 2.1% Switzerland 2.8% Total 3.5% Spread vs. guaranteed rates 180bps 180bps 4.0% 3.9% 2.3% 2.2% Current investment policy on Fixed income Secured financial bonds ~15% Other ~10% Government bonds ~25% Corporate bonds ~50% AXA Group L&S asset yield AXA Group L&S average guaranteed rate No investments on Eurozone peripheral countries government bonds Greater allocation to corporate bonds 42 AXA Earnings February 16, 2012

43 2011 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and Free Cash Flows 43 AXA Earnings February 16, 2012

44 Group Embedded Value Group EV at 31.5 bn Key drivers of change In Euro billion VIF TNAV Operating return Investment experience Dividend Forex vs billion -8.0 billion -1.6 billion +0.4 billion 19% operating return on Group EV Negative investment experience, mainly due to decrease in interest rates, increase in interest rate volatilities, widening sovereign bond spreads and widening credit spreads, partly mitigated by a higher liquidity premium (Euro 8.3 billion in 2011 vs. Euro 1.7 billion in 2010) TNAV up to Euro 14.5 billion 44 AXA Earnings February 16, 2012

45 Group operating Free Cash Flows Operating Free Cash Flows 1 In Euro billion Life & Savings Property & Casualty % Strong increase driven by both Life & Savings and Property & Casualty Asset Management Remittance ratio +19% Excluding proceeds from disposals Operating Free Cash Flows Cash dividends from entities Increase in remittance ratio from entities FY09 Remittance ratio 59% 75% 76% 45 AXA Earnings February 16, 2012 All notes are on page 65 of this document

46 Life & Savings operating Free Cash Flows FY09 Euro billion New business IRR at 10.3% Euro billion New business IRR at 10.9% Euro billion New business IRR at 11.5% (2.5) 0.8 (2.2) 1.4 (2.2) Target Expected inforce surplus generation New business investments (capital and cash strain) Life & Savings operating Free Cash Flows Stable new business investments with improved business mix Increase in expected inforce surplus generation mainly driven by better recurring operational experience 46 AXA Earnings February 16, 2012

47 Table of contents 2011 key highlights Page 4 by Henri de Castries, Chairman and CEO 2011 financial performance Page 14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Business overview Page 48 by Mark Pearson, President & CEO of US operations Véronique Weill, Group COO Concluding remarks Page 62 by Henri de Castries, Chairman and CEO 47 AXA Earnings February 16, 2012

48 2011 financial performance Focus on the US Focus on efficiency program 48 AXA Earnings February 16, 2012

49 Focus on the US Good operating performance in adverse economic conditions In USD million Key Operating Metrics APE 1,319 1,411 Diversification strategy shows good momentum NBV Underlying Earnings impacted by 2H11 market deterioration Underlying Earnings Net Income reflects impact of goodwill reduction Net Income 548 (475) Efficiency programs delivered improvements Gross expenses 1,408 1, AXA Earnings February 16, 2012

50 Focus on the US Strong momentum with solid track record of diversification and efficiency In USD million Life and Annuity New Business APE +14% 989 In USD million Gross expenses 1-11% 1,408 1, Life +40% Non-GMxB Annuity +10% Aligned distribution: AXA Advisors now generating 66% of APE (up from 42% in FY07) GMxB Retirement Cornerstone +24% Innovative: Newly launched annuity and life products represent 41% of sales GMxB Accumulator -29% Efficient: 27% reduction in headcount since peak in FY07 Changes are on a comparable basis 50 AXA Earnings February 16, Administrative expenses + acquisition expenses, excluding commissions 2. Includes one-time reduction to employee benefit plans of USD 51 million

51 Focus on the US Excluding GMxB technical margin, pre-tax underlying earnings are growing In USD million, pre-tax +10% , , Add back GMxB hedge margin and lapse impact net of DAC before GMxB impact Net investment margin Fees & revenues and other technical margin Commissions & expenses (net of DAC cap) DAC & VBI amortization before GMxB impact GMxB hedge margin and lapse impact net of DAC after GMxB margin Change is on a comparable basis 51 AXA Earnings February 16, 2012

52 Focus on the US Reduction of US goodwill by USD 1.3 billion VA GMxB Sales & Risk Profile Impact on capital Initial capital as % premium No longer for sale Acc 7 Series New Business Retirement Cornerstone Accumulator % 1.6% 0.2% Interest rates -100bps 12.1% 1.6% 0.2% Equity markets -25% 10.2% 3.4% 2.7% Goodwill primarily from 2000 purchase of remaining minority interest in AXA Financial Total US goodwill of USD 3.5 billion reduced by USD 1.3 billion US VA GMxB Historical First Year Premiums In USD billion No impact on Risk Based Capital Diversification success: GMxB Accumulator reduced from 19% to 12% of total APE Retirement Cornerstone and Accumulator significantly more capital efficient than legacy book FY07 FY08 FY09 Accumulator Retirement Cornerstone 52 AXA Earnings February 16, 2012

53 Focus on the US VA GMxB business Policyholder behavior VA GMxB Lapse Rates Actual vs. Expected (post surrender charge period) Reserve assumption Actual experience % Lapse assumption change net impact (in USD million) Lapse assumptions in line with experience FY09 (38) (130) (211) Reserve assumptions now in line with experience Reserve based on projections of different market conditions and different lapse rates based on in-the-moneyness and policy duration Future experience could deviate from current projections If lapse rates declined 0.5% annually beyond what is already projected, underlying earnings 1 would be impacted by ca. USD -160 million Natural hedge on annuitization risk % in-the-money of clients eligible to elect 2 GMIB election experience Actual GMIB election reserve assumption 0%-20% <1% 5% 20%-50% <3% 10% > 50% <4% 15% Conservative annuitization assumptions no evidence of increased annuitization Natural hedge between GMIB and GMDB reserves as policyholder unable to elect both If annuitization reserve assumption doubled, underlying earnings 1,3 would be impacted by ca. USD -150 million 1. Net of tax and DAC 2. % of I.T.M. represented by Account Value/ Benefit Base Assumes low interest rates environment. Actual reserve movement dependent upon market conditions but net effect in various scenarios has similar impact 53 AXA Earnings February 16, 2012

54 Focus on the US VA GMxB business Strong discipline for volatile markets Disciplined Risk Management Suspended additional contributions into legacy Accumulator Introduced AXA Tactical Manager and Asset Transfer Program tools to manage volatility 65% of GMxB Account Values in passive funds vs. 4% in FY07 Prudent hedge reporting AXA does not use non-performance risk adjustment NPR as permitted under US GAAP, which reduces amount of reserve by applying company s own credit spread to discount rates Industry also uses US GAAP SOP 03-01, which is based on stochastic historical scenarios and smoothes losses over time AXA hedges both living & death benefits and reflects impact in Underlying Earnings US Variable Annuity GMxB Underlying Earnings In USD million, net of DAC and tax 1 FY07 FY08 FY09 Total VA base fees & other, less expenses 411 (28) GMxB Hedge Margin (9) (636) 22 (144) (350) (252)m o/w Basis 20 (344) (30) (17) (86) o/w Volatility (1) (256) (182) (88) (198) o/w Interest rates, credit spreads & other (27) (37) 234 (39) (66) (152)m Lapse assumption change impact - - (38) (130) (211) VA GMxB Underlying Earnings 402 (665) (345) 1. Assumes notional tax rate of 35% to be on a comparable basis 54 AXA Earnings February 16, 2012

55 Focus on the US Diversified, innovative and disciplined: well positioned for growth Reshape Life & Savings business More diversified product portfolio 41% of sales in from newly launched products Expanded VA platform to meet wider client base Strong #3 position in educational 403(b) market Continued growth of life sales in selected markets Increased profitability Enhanced risk profile and improved product margin Focused sales on less capital intensive and interest sensitive products NBV margin at 13% vs. 12% in Employer sponsored SCS 46% Athena Universal Life 32% Indexed Universal Life 1% Variable Annuity (APE) Accumulator 26% 27% Retirement Cornerstone Total APE: USD 621 million 31% 5% 4% 28% Variable Life Employer sponsored SCS Life (APE) Term Other 43% Athena Universal Life 17% 41% Indexed Universal Life 7% 17% 18% 32% Accumulator Retirement Cornerstone Total APE: USD 644 million 3% 22% Term Other Variable Life Total APE: USD 246 million Total APE: USD 345 million 55 AXA Earnings February 16, 2012

56 AXA Equitable has a clear strategy for growth Our objective: deliver sustainable earnings and Free Cash Flows growth 1 Strong presence in the US - the world s largest profit pool 2 Well positioned to grow with unique assets in distribution and inforce 3 Disciplined risk management 4 New products gaining momentum 5 Increasing Free Cash Flows while growing new business 56 AXA Earnings February 16, 2012

57 2011 financial performance Focus on the US Focus on efficiency program 57 AXA Earnings February 16, 2012

58 AXA s efficiency program: Euro 1.5 bn cost savings in mature markets (excl. Direct) by 2015 Ambition AXA 0.3 billion savings achieved in 2011 In Euro billion In Euro billion Maintain P&C and L&S administrative costs o/w Euro 0.2 bn 2011E- 2013E 2014E- 2015E Total administrative cost savings P&C and L&S administrative costs o/w Euro 0.1 bn P&C acquisition costs In Euro billion Reduce P&C acquisition ratio by 1.5 pts E- 2013E E- 2015E 0.4 P&C Acquisition cost savings 2011 achievement 2012E- 2015E E 58 AXA Earnings February 16, 2012

59 1 Focus on P&C and L&S administrative costs Euro 0.2 billion savings in 2011 In Euro billion (0.2) (0.1) 5.9 Operational ~67% External spend ~22% IT costs ~11% Admin. expenses Inflation, volume and other Savings One-offs and Exceptional Admin. expenses Operational performance 2011 achievements 2012 outlook Lean management programs (France, Belgium) Productivity : US, Germany, MedLA, France, UK Offshoring (France) 1,300 FTE reduction globally Lean management programs have started in Italy, Japan, Germany and at AXA Tech External spend Group transversal initiatives: commercial lever, challenge the demand Ł Starting to deliver in Germany, US, Japan and France (real estate) Group transversal initiatives launched in professional and IT services and IT software IT costs Infrastructure transformation plan designed after competitive benchmark against best in-class external provider Implementation of the transformation plan has started 59 AXA Earnings February 16, 2012

60 2 Focus on P&C acquisition ratio Euro 0.1 billion savings in 2011 Renegotiation of commissions with brokers in the UK and agents in Spain Containment of general distribution expenses in Germany and in the UK Change in product mix with emphasis on businesses with lower commission ratios in Belgium and Germany 18.2% (0.3%) (0.2%) (0.1)% 0.1% 17.7% 16.7% Acquisition ratio Commissions Optimization Product mix of distribution costs, marketing, productivity Forex and other Acquisition ratio Ambition AXA 60 AXA Earnings February 16, 2012

61 Table of contents 2011 key highlights Page 4 by Henri de Castries, Chairman and CEO 2011 financial performance Page 14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Business overview Page 48 by Mark Pearson, President & CEO of US operations Véronique Weill, Group COO Concluding remarks Page 62 by Henri de Castries, Chairman and CEO 61 AXA Earnings February 16, 2012

62 2011 key messages Resilient business model Dividend maintained Solid set of results Strong operating Free Cash Flows Robust balance sheet Delivering on Ambition AXA operational initiatives 1 Property & Casualty Improved new business profitability Current Year combined ratio 103% <100% 2 Active capital management High growth market Euro 3.2 billion 3 Delivering on cost savings initiatives Life & Savings New business margin 22% 25% Euro 4.1 billion Proceeds from disposals Euro 0.9 billion Deleveraging 0.3 achievement 2012E- 2015E E 62 AXA Earnings February 16, 2012

63 Going forward Maintain agility to deliver on Ambition AXA strategic priorities in the current environment Selectivity Acceleration Efficiency Actively grow Protection & Health Extract value from Life & Savings inforce book Foster growth in Direct business Accelerate in High Growth Markets Deliver on cost savings Maintain strong focus on balance sheet strength and cash flow management Next investor day in 4Q AXA Earnings February 16, 2012

64 Q&A session Q&A session 64 AXA Earnings February 16, 2012

65 Notes Page 5 1. Operating Free Cash Flows correspond: (i) for Life & Savings, to the expected inforce surplus generation (cash and capital) net of New Business investment (capital and cash strain). (ii) For Property & Casualty and Asset Management, to the underlying earnings, realized capital gains and changes in local solvency requirements related to internal growth. 2. Net of proposed dividend to be paid in 2012 Page 6 1. Based on Adjusted Earnings, net of undated debt interest charges Page 9 1. Change on a comparable basis corresponds to: For activity indicators, constant exchange rates, scope and methodology For earnings and profitability indicators, constant exchange rates Page ROE: Return corresponds to adjusted earnings net of interest charges on undated debt. Equity corresponds to average shareholders equity excluding undated debt and reserves related to change in fair value Page Exceptional gain on sale of Australia & New Zealand operations was 0.6bn vs. 0.7bn estimated at the date of closing of the transaction due to change in long term tax rate in France in 4Q11 Page In Life & Savings, high growth markets are: Hong-Kong, Central & Eastern Europe (Poland, Czech Republic, Slovakia and Hungary), South-East Asia (Singapore, Indonesia, Philippine and Thailand), China, India, Morocco, Mexico and Turkey. 2. Closing of pension fund new business in Poland and Hungary following changes in regulation Page In Property & Casualty, high growth markets are: Morocco, Mexico, Turkey, Gulf, Hong-Kong, Singapore, Malaysia, Russia, Ukraine and Poland (exc. Direct) Page Excluding change in net unrealized capital gains of Euro +0.2 billion related to AXA APH transaction, which are included in the Euro -2.5 billion impact from AXA APH transaction on shareholders equity Page AXA internal economic model calibrated based on adverse 1/200 years shock Page Including Euro -0.3 billion of reversal of mark-to-market on interest rate derivatives vs Euro -0.4 billion in 2. (Net financing debt + undated subordinated debt) divided by (shareholders equity incl. undated subordinated debt excl. FV in shareholders equity + net financing debt) 3. Including interest charge on undated subordinated debt Page Excluding Forex, minority interests and other 2. Excluding net unrealized gains on bank loans. Total off-balance sheet net unrealized gains, including net unrealized gains on bank loans, amounted to 3.6bn in and 4.3bn in Page Operating Free Cash Flows correspond: (i) for Life & Savings, to the expected inforce surplus generation (cash and capital) net of New Business investment (capital and cash strain). (ii) For Property & Casualty and Asset Management, to the underlying earnings, realized capital gains and changes in local solvency requirements related to internal growth. 2. Including International insurance 3. Including Banking activity 65 AXA Earnings February 16, 2012

66 Definitions 2011 financial statements are subject to completion of audit procedures by AXA s independent auditors. AXA's results have been prepared in accordance with IFRS and interpretations applicable and endorsed by the European Commission at December 31, Adjusted earnings, underlying earnings, Life & Savings EEV, Group EV and NBV are non-gaap measures and as such are not audited, may not be comparable to similarly titled measures reported by other companies and should be read together with our GAAP measures. Management uses these non-gaap measures as key indicators of performance in assessing AXA s various businesses and believes that the presentation of these measures provides useful and important information to shareholders and investors as measures of AXA s financial performance. For a reconciliation of underlying and adjusted earnings to net income see pages 17 and 18 of this presentation. AXA Life & Savings EEV consists of the following elements: (i) Life & Savings Adjusted Net Asset Value (ANAV) which represents tangible net assets. It is derived by aggregating the local regulatory (statutory) balance sheets of the life companies and reconciled with the Life & Savings IFRS shareholders equity. (ii) Life & Savings Value of Inforce (VIF) which represents the discounted value of the local regulatory (statutory) profits projected over the entire future duration of existing liabilities. Life & Savings New Business Value (NBV) is the value of the new business sold during the reporting period. The new business value includes both the initial cost (or strain) to sell new business and the future earnings and return of capital to the shareholder. AXA Group EV is the sum of Life & Savings EEV and Shareholders Equity of other businesses 66 AXA Earnings February 16, 2012