AXA to Cut Costs to Boost Earnings
June 21 2016 - 3:10AM
Dow Jones News
PARIS—Insurance giant AXA on Tuesday released its strategic plan
for the next four years, saying it will cut costs, expand in
higher-growth countries and use digital technologies to offer more
services to clients.
The announcement is part of a plan to boost growth after eight
years in which record-low interest rates have weighed on the
earnings of AXA and other insurers. The industry relies on bond
yields to generate a large chunk of its profit from reinvesting
huge stockpiles of cash.
The Paris-based company set out a number of metrics for the
period through 2020. It aims to boost underlying earnings per share
by 3%-7% each year through 2020, generate free cash of between €28
billion ($31.72 billion) and €32 billion and cuts costs by €2.1
billion.
The company is also pushing to use digital technologies to
evolve from a business that merely accepts premiums and pays
claims. AXA wants to use digital technologies help clients avoid
health and other risks, and sell more services to them after a
payment is made.
"It's still easier to buy a book from Amazon than insurance from
AXA," said Emmanuel Touzeau, AXA's director of communication.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
June 21, 2016 02:55 ET (06:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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