Axa to return 6 billion euros to investors in new payout policy

AXA plans to return about 6 billion euros (S$8.73 billion) of final yr’s earnings to traders below a brand new payout coverage unveiled by chief govt officer Thomas Buberl.

The French insurer vowed to return 75 per cent of underlying earnings per share over the approaching years, together with 15 per cent by way of buybacks. For final yr, Axa introduced a dividend of 1.98 euros a share together with a 1.6 billion euro buyback, in keeping with the brand new coverage.

Underlying revenue of seven.6 billion euros final yr got here in simply forward of analysts’ estimates, whereas internet revenue fell quick.

Since taking on in 2016, Buberl has shifted the insurer’s focus from life insurance coverage to property and casualty in addition to medical health insurance, in a bid to make Axa much less delicate to monetary markets. He stated in an interview this month that he intends to “scale up” the agency’s enterprise insuring company dangers within the subsequent part of the agency’s progress.

The new payout goal, which features a pledge that the dividend per share will probably be at the very least equal to the one paid the yr earlier than, is a part of a technique replace unveiled on Thursday (Feb 22). As a part of that plan, Axa targets progress in underlying earnings per share of 6 per cent to eight per cent on common from 2023 till 2026, and goals to achieve an underlying return on fairness between 14 per cent and 16 per cent over the 2024 to 2026 interval. 

Axa beforehand focused dividend funds equal to 55 per cent to 65 per cent of underlying earnings per share. It didn’t have a objective for buybacks as a part of its annual capital return coverage, although had repurchased some 4.3 billion euros in inventory since 2021. The buyback introduced on Thursday consists of 500 million euros to keep away from dilution from a reinsurance settlement introduced in December.

Swiss rival Zurich Insurance on Thursday introduced an 8 per cent improve in its dividend, together with a buyback of as much as US$1.3 billion. German rival Allianz is scheduled to report earnings on Friday. BLOOMBERG