(Add stock price performance)
PARIS, May 4 (Reuters) – Axa has said it expects its solvency ratio to rise further in the second quarter, with the French insurer confirming its 2021 forecast for the XL insurance unit on Tuesday, which has been hit hard by the COVID-19 pandemic last year.
Europe’s second-largest insurer after Germany Allianz said its solvency ratio, which measures capital strength under European Union risk measurement rules, was 208% at the end of March, up 8 points compared to the end of 2020.
“We expect our solvency ratio to continue to increase in the second quarter,” Axa CEO Etienne Bouas-Laurent told reporters after the insurer published its results.
Axa also said that XL is on track to meet its underlying earnings target of 1.2 billion euros ($ 1.44 billion) in 2021 after recording a loss of 1.4 billion euros. euros last year.
“The price increase is very strong,” said Bouas-Laurent when asked about the performance of XL.
Axa recorded a 3% drop in turnover in the first quarter, with turnover down 4% in non-life insurance and 4% in life insurance and savings.
The insurer, still facing coronavirus-related litigation over business interruption claims in France, declined to say how much money it had set aside to cover legal risks.
Bouas-Laurent said some provisions were part of Axa’s € 1.5 billion recorded last year as claims for business interruption and cancellation of events due to the pandemic.
Shares of Axa, which said last year it would continue to streamline its business by selling assets over the next several years in an effort to boost returns, have gained 21.43% since the start of 2021. ($ 1 = 0.8321 euro) (Reporting by Matthieu Protard; Editing by Jonathan Oatis and Alexander Smith)