Axa announces costs cuts and targets 3-7% earnings growth

Axa, the French insurance group, announced head office cost cuts and a management shake-up as it confirmed its financial targets at an investor day on Tuesday.

The company said it would cut head office costs by as much as 25% that it hopes will save about €300m a year.

Increasing scale

Chief executive Thomas Buberl set out plans for growth in health, property and casualty insurance, and to concentrate its operations in key growth areas where it has scale and potential - concentrating on fewer countries.

“AXA is well on track to achieve its Ambition 2020 targets, and is taking important steps towards making the group simpler for all our stakeholders, and to foster growth,” Buberl said.

He added: “Our reliable and sustainable cash generation capacity supports our investment for growth and sustained attractive dividends.”

Management changes

Meanwhile, a management shake-up sees the departure of several long-serving managers including Gaelle Olivier, head of global property and casualty and Paul Evans, head of life, savings and health.

Financial outlook

The company said it aimed to increase earnings per share by 3%-7% every year the plan to 2020 and said it expected to have a cumulative cashflow of €24bn-€27bn over the same timeframe.

The markets did not appear significantly impressed by the presentation in early trade on the Paris Stock Exchange as the shares nudged 0.4% higher to €25.18.