AXA, the world's largest insurance company by sales, posted a 4 per cent rise in underlying first-quarter revenues yesterday and said steadier equity markets encouraged greater optimism for the full year.

The Paris-based insurer said total turnover in the first quarter, which it called challenging, was €20.6 billion (£16.22 billion), a decline of 3.3 per cent from the same period a year ago, but a rise of 4.3 per cent measured on a comparable basis.

Its key life insurance division, which brings in 60 per cent of turnover, showed a rise of 0.6 per cent on a like-for-like basis to €12.4 billion, the company said. AXA is the biggest motor insurer in the Republic and owns the former Guardian-PMPA.

One analyst said the first quarter had been mixed, in line with guidance given by the company at its recent shareholder meeting. AXA chairmen Mr Henri de Castries said recent steadying in global equity markets was encouraging.

"We are becoming more optimistic regarding this year's revenue growth, due to the recent stabilisation of equity markets and continuing higher rates in our property and casualty markets," he said. Revenues in property and casualty, AXA's second most important division, accounting for 24 per cent of sales, rose 3.3 per cent comparably to €5 billion.

International insurance brought in €2 billion, leaping 40.5 per cent on a comparable basis, while asset management registered an 0.6 per cent decline to €0.9 billion despite weakness in global equity markets.

Mr de Castries said that both geographic and business line diversity had contributed to a sturdy quarter in the face of equity market weakness.

"The decrease in annuities sales in France and the United States, the two largest contributors, was offset by a solid performance in other geographic areas, especially the United Kingdom, Belgium and Australia," he said.

"Despite the drop in French and US premium income, both operations outperformed their respective markets," he added.

The group, trading at a price to earnings ratio of 20.05 per cent on 2001 estimates, sold its investment bank Donaldson Lufkin & Jenrette to CSFB last year.