AXA New Zealand Announces Half-Year Results
AXA New Zealand today announced an operating profit of $14.7 million before one-off adjustments for the six months to 31 March 2000, which compares with $17.9 million for the same period last year.
Operating profit decreased as a result of falling investment earnings from subdued local and global investment markets. There was also a reduction in profitability in risk business driven particularly by higher claims in the company's income protection insurance.
Profits were further affected by AXA New Zealand's progressive implementation of its increased focus on the faster-growing funds management sector. The company's strategy is also to maintain a strong presence in its risk business.
"These results are in line with our expectation. We have been focusing on strategic repositioning during the six month period. This has involved significant effort and resources being invested in the funds management business, which is where we see our growth in the future," AXA Chief Executive Ross McEwan said.
"The one-off adjustments of $16.8 million were primarily made up of expenses associated with rationalising and exiting from some non- core businesses, and tailoring AXA's property requirements to commercial needs. In addition, we've streamlined our product range by closing off some older style savings and investment products and introducing new leading edge-products such as the recently launched AXA Business Superannuation master trust," Mr McEwan said.
Highlights of the six months included: strong growth in funds management profitability; growth in risk annual premium of 16.3 per cent; continued profitability in conventional business and health insurance; strong growth in Wholesale funds; and continued reduction of management expenses in line with AXA New Zealand's target of achieving an overall decrease in operating expenses of 35 per cent by 2001.
AXA New Zealand's result was posted in a period of strong brand awareness, with customer recognition of the brand being 75 per cent total prompted recall since the rebranding in August 1999.
"We're confident that our investment in repositioning the business, in an environment of growing AXA brand recognition, improved funds management performance and progressive development of innovative products, will lay the foundations for good profit results going forward," Mr McEwan said.