PARIS (Reuters) – Axa reported an annual profit slightly below expectations on Thursday, as the rise in the cost of debt and technology investments weighed on results.

The number two insurance company in Europe, which is also due to unveil its new strategic plan this Thursday, saw its operating profit for the year increase by 5% to 7.60 billion euros, in line with its forecasts but lower to the expectations of analysts who were counting on 7.69 billion euros, according to a consensus compiled by the group.

Gross written premiums and other income for the period increased 1% to €102.7 billion, also below analysts’ expectations (€103 billion), with the loss of two global clients in France and the decline in revenues from the asset management branch.

Axa’s solvency ratio, a key measure of its financial health, stood at 227%, up 12 points from the previous year, driven by high operational performance.

These lower than expected results can be explained “for two reasons: our debt which is a little more expensive due to the rise in rates and, secondly, the fact that we have increased investments in technology”, declared the financial director , Alban de Mailly Nesle, during a conference call with journalists.

The group, led by Thomas Buberl since 2016, announced a so-called “capital management” policy as part of its new strategic plan, aiming for higher returns for shareholders with a payout rate of up to 75%, including a dividend distribution rate of 60%.

This policy results in particular in an annual dividend for 2023 of 1.98 euros per share, up 16% compared to 2022.

In total, Axa will return up to 6 billion euros to its shareholders in 2024, divided between 4.4 billion euros in dividends and up to 1.6 billion euros in share buybacks.

(Report by Mathieu Rosemain, by Augustin Turpin)

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