Strong half year for Architas, Axa remains resilient

By Kirsten Hastings, 3 Aug 16

Asset manager Architas reported a 52% increase in total assets in the first half of 2016, while parent company Axa Group recorded stable revenue and underlying earnings, with net income up 4% against the same period last year.

Architas

Total assets, both under management and advice, increased to £21.2bn ($28.1bn, €25.1bn) from £14bn in 1H15 following the continued expansion of the company’s UK and European businesses.

The increase in assets over the last 12 months includes the 2015 acquisition of the Axa IM Multi-Manager business and the Axa private management businesses in France and Belgium, which now trade under the Architas brand.

Total net new money, which includes flows into Architas’s core UK range, unit-linked business and institutional portfolios, was £334m in 1H16.

Expansion plans

Despite turbulent market conditions, Architas has continued to see strong flows across all areas of its business, said company chief executive Hans Georgeson.

“The last 12 months have seen tremendous change for both the industry and Architas. During this time we have continued to invest in our UK and European businesses, with the support of the Axa Group.

“In the UK we have built on our core risk profiled range with the addition of specialist alternative and income funds, all based on our unfettered, best of breed multi-management philosophy. We are also set to launch our first range of model portfolios.

“Europe is experiencing its own challenges, not least in the light of the referendum result. Overall we have still seen strong flows through the Architas businesses in France and Belgium and our new venture with Axa Germany is starting to gain momentum. We are in discussions with other countries in Europe, the Gulf region and Asia as we continue to expand our business across the Axa Group,” Georgeson said.

Axa Group

Growth in Axa’s Property & Casualty and International Insurance businesses was offset by declines in the group’s Life & Savings and Asset Management arms. As a result, total revenue for the first six months of 2016 was relatively stable compared with a year ago.

Thomas Buberl, incoming Axa chief executive, said: “We have delivered resilient underlying earnings of €3.1bn despite market headwinds and a higher cost of natural events. Our balance sheet remains very strong with a Solvency II ratio at 197%, well within our target range.”

The natural events refer to the storms in Germany and floods in France, combined with higher claims in Belgium as a consequence of floods in May and June, the company said.

“In Life & Savings, we focused on profitable business growth with increased sales of Protection & Health and capital light Savings products. In Property & Casualty, we delivered strong growth in both Personal and Commercial lines while maintaining our emphasis on profitability. Asset Management continued its momentum with net inflows in both our asset managers,” he added.

Ambition 2020

In June, the group unveiled its five-year strategic plan to transform the company’s business model from “payer to partner”.

At the time, Buberl said that his plan meant accelerating business innovation to meet the rapidly evolving needs of customers in the digital world and developing areas such a prevention and care.

The company has already seen significant change since the start of the year, including: