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Strong growth for AXA New Zealand

Media Release
19 February 2008

Strong growth for AXA New Zealand

AXA New Zealand today announced its financial results for the 12 months to 31 December 2007.

Operating earnings again grew strongly, up 22% to $59.1m from $48.6m in 2006. Key contributors were higher financial protection sales and lower-than-expected claims.

Approximately 66% of operating earnings were from Financial Protection and 34% from Wealth Management.

Management expenses rose 6% to $63.7m due primarily to investment in product development to meet the requirements of tax reforms and the development of AXA’s KiwiSaver offering.

The result reflects a 41% rise in financial protection operating earnings to $39.2m, with financial protection new business sales increasing 17% to $27.4m.

Wealth Management’s operating earnings eased by 4% to $19.9m due to increased project costs relating to KiwiSaver and Portfolio Investment Entity (PIE) tax changes.

Chief Executive Ralph Stewart said the tax changes made it easier for New Zealand savers and investors to make investment choices on their merits, without the confusion of complicated tax structures.

“The tax reform package has significantly increased the incentive to invest in managed funds, and the implications for AXA’s customers and for AXA are particularly exciting,” he said.

Wealth Management retail sales increased by $113m (14%) in 2007 as part of continuing success in attracting new advisers, productivity gains and continuing investment in distribution channels, including Spicers.

Having completed the KiwiSaver and PIE project implementation work, AXA New Zealand now has 49 retail and 22 wholesale PIE unit trusts.

KiwiSaver enrolments exceeded 30,000 at 31 December reflecting the early success of the initiative as a whole, Mr Stewart said.

Looking forward

Mr Stewart said the company’s goal was to double AXA New Zealand’s enterprise value by 2012.

“Continued improvements to the financial protection business allied with the investment reforms to date – and upcoming reforms – suggest a positive future for the business.”

He said the emphasis of financial market reform would move to adviser regulation over the next three years. The introduction of initiatives such as the AXA Training Academy would enable AXA to support and develop advisers in the new environment.

“The New Zealand financial services industry is rapidly moving to the next level of development with new regulation improving product structures, disclosure and transparency for all savers and investors. We are right behind these.”

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