The acquisition of XL Group is a turning point

On the occasion of AXA’s 2018 shareholders’ meeting that takes place today in Paris, I wanted to take this opportunity to drop you a few lines to revisit 2017 and quickly come back on the big milestone of the beginning of 2018, the acquisition of XL Group.

 2017 was an excellent year for AXA. Our revenues are stable overall but growing in our priority segments, namely health, protection, and commercial lines. For the first time in AXA's history, our profits have surpassed the 6 billion euros threshold, with all geographies contributing to this strong performance. In addition, our balance sheet continues to be robust. 

 2017 was also the year of structuring decisions for the Group. The deployment of our Ambition 2020 strategy, the rollout of a new organization that is both more agile and closer to the customer, the projected IPO of our life and savings and asset management businesses in the US, and the redefinition of our geographic footprint, have decisively paved the way for the Group’s transformation.

 The first months of 2018 have been just as critical. In particular, I would like to say a few words on the acquisition of XL Group, which marks a major step in the acceleration of our strategy while staying on track to achieve our Ambition 2020 objectives.

  Why this acquisition? 

 First, the acquisition of XL will make AXA the number 1 global Commercial Lines player, in one of our three priority segments. This transaction will allow us to generate the growth and earnings of tomorrow and lay the groundwork for a new AXA. Across the world, countless businesses are still under- or uninsured, even as they face new risks, the most pressing of which being cybersecurity. What’s more, we can easily project that today’s major risks, like motor, will gradually shift towards Commercial insurance as both driverless cars and new ride sharing habits develop and become commonplace. To take advantage of these new growth engines, it is thus critical for us to become the preferred partner of all businesses.

 Second, the acquisition of XL will enable us to shift the Group's risk profile. Adding up the upcoming IPO of our life and savings and asset management businesses in the US, we will increase our insurance risks and reduce our exposure to financial markets. Why is that important? Both the IPO and the XL operation will help us diversify our risks, reinforce our growth prospects and increase our cash remittance potential.

 Third, XL Group’s activities are complementary to ours, in particular with our subsidiaries AXA Corporate Solutions and AXA Art. XL's strong positioning in the large and upper mid-market space, including in specialty lines and reinsurance, will complement and further enhance AXA’s already strong presence in the SME segment, the European corporate risks market and specialties such as art insurance. I am convinced that those strong complementarities will generate many opportunities to create additional value together in the future. 

Lastly, XL, just like AXA, is highly recognized for the expertise of its world-class teams and renowned for its innovative client solutions. Through this acquisition, not only will we serve new customers and further strengthen our balance sheet, but we will also and most importantly welcome lots of new talents who, when connected to the people at AXA, will propel the Group in a new dimension while preserving the best of our two cultures.

Subject to the transaction’s completion, the acquisition of XL Group is a major leap forward in the movement to reposition AXA in the years to come. While the questions raised by this transaction and its implementation are legitimate, all the teams at AXA are fully mobilized to carry it through and make AXA the world's leading Commercial Lines player.

Thomas