Axa Ireland, the largest general insurer in the market by customer premiums, decided to hold off paying dividends to its French parent on last year’s earnings, marking the first such hiatus in five years, as it built up capacity to start underwriting health insurance for its Laya Healthcare brand from the start of this year.
The Irish unit, officially known as Axa Insurance DAC, had paid €270 million in dividends to Paris-based Axa Group over the past four years, including money that was temporarily stored during the Covid-19 pandemic when regulators ordered insurers to avoid payouts and preserve capital.
The Axa Group acquired Laya Healthcare, the Republic’s second-largest health insurer, in 2023 for €650 million. A unit of Zurich-based reinsurance giant Swiss Re, called Elips Insurance, had underwritten Laya policies for years, meaning the business was essentially a tied agent, before Axa Ireland started to write new policies from the start of this year.
“No dividend is proposed in relation to the accounting year 2024 due to the capital requirements linked to health underwriting for 2025 and beyond,” Axa Insurance DAC said in its latest annual solvency and financial condition report (SCFR).
“The company is focusing on reinvesting its financial resources to strengthen its capital base to support growth in its health business.”
The Laya deal is the biggest carried out by the Axa Group in Ireland since it secured a major foothold in the market 26 years ago by acquiring the country’s largest motor insurer at the time, Guardian PMPA Insurance, as part of a multibillion-euro international deal.
Axa Ireland, which is led by chief executive Marguerite Brosnan, saw its insurance revenues grew by 8 per cent last year to €1.15 billion, driven by premium increases across its motor and household lines, as damage costs increased amid rising spare parts and labour costs in an inflationary environment.
The company’s insurance operating profit – a keenly watched barometer of the performance of an insurer’s core business of underwriting risk – fell to €17 million last year from €28 million in 2023. It had recorded a net loss on its insurance underwriting business in 2022.
“AXA Insurance dac has delivered a strong performance in 2024 achieving growth in both insurance revenue and profit for the year. Importantly, during the year necessary pricing action was taken in direct response to the increase in motor accident numbers, coupled with increased cost of injury claims incurred,” the report said.
“Price adjustments were made in order to offset a potential underwriting loss driven by the inflationary pressures in the cost of claims.”
Net income derived from its investments portfolio jumped to €133 million from €75 million, helping Axa Ireland increase its net profit to €128 million from €94 million for the previous year.
Some 69 per cent of the group’s revenues were generated in the Republic, with 26 per cent in the United Kingdom, mainly reflecting the fact that Axa Ireland is an all-island business. The remaining 5 per cent was recorded as revenues from Europe.
Motor coverage accounted for 57 per cent of its revenues, with household insurance a further 10 per cent. The remainder was largely made up of commercial insurance.
Axa Ireland’s solvency capital reserves rose to €683 million, or almost 1.5 times its regulatory requirement, from €594 million at the end of 2023.
