Credit Suisse Group AG

Total revenues increased 6% year over year to EUR 34 billion. P&C revenues were up 7%; Life premiums were up 6%; Health premiums were up 7% to EUR 4.8 billion; Asset Management revenues were up 3%. AXA reported a Solvency II ratio of 229% at end-March, up 2 points versus full year 2023. Management said group nat cat in Q1 was below the prorated annual budget, while the annual nat cat budget remains 4.5 points of combined ratio. For forward guidance, AXA said its annual nat cat budget remains 4.5 points, expects the Baltimore bridge loss to be nonmaterial at group level, and said the Munich Re VA reinsurance deal will reduce underlying earnings by around EUR 20 million per year from 2024 onward but will be offset EPS-wise by a EUR 200 million share buyback. Management also reiterated confidence in its strategic plan and said it expects commercial pricing to remain around loss trend or slightly above into 2025, while U.K. Health profitability should recover early 2025 or by year-end 2024.

Alban Nesle’s tone was confident and constructive, framing Q1 as a “very strong start” and saying the group is “very happy” with its numbers. He emphasized that growth is coming from all major businesses and that AXA’s new strategic plan is already showing through in the quarter. He also highlighted disciplined portfolio management in P&C, including risk selection and pricing actions, and said AXA remains open to options on in-force management if the price is right.

Nesle highlighted a robust balance sheet and capital generation, pointing to the 229% Solvency II ratio, up 2 points, with the change driven by +7 points from normalized capital generation, -5 points from foreseeable dividends and annual share buybacks, +1 point from sub debt actions, -3 points from expected regulatory changes, and +2 points from markets. He noted the restricted Tier 1 issuance of EUR 1.5 billion in January and the repurchase of around EUR 1.2 billion of sub debt through a tender offer. On the Munich Re reinsurance deal, he said AXA Life Europe will free up EUR 250 million of capital, while the transaction reduces underlying earnings by around EUR 20 million per year from 2024; he also said the German back-book deal cancellation means AXA keeps earnings of a bit more than EUR 30 million and forgoes about EUR 200 million of net cash compared with that deal. He added that AXA invested at 3.8% overall in Q1 and that the group plans to manage grandfathered debt proactively, potentially using senior debt as well, with only a couple of points of solvency impact.

Analysts pressed on whether U.K. Motor volume declines were larger than implied by pricing, and management said volumes are down less than 40% and that the mix shift also reflects letting go of worse risks, not just customer loss. Questions on commercial pricing and North America casualty led management to say U.S. professional lines remain soft, but the rest of the portfolio is still above loss trend and casualty reserves will be reviewed in Q2. On the German back-book deal, management said higher interest rates increased the value of the book to AXA and closed the duration gap, so both sides chose to terminate; AXA remains open to future options if a good offer appears. Analysts also asked about Baltimore bridge exposure, and management said its loss estimate of less than EUR 100 million assumes industry loss of around USD 1.4 billion to USD 1.5 billion, and would still stay below EUR 100 million even if industry loss rose to USD 2.5 billion to USD 3 billion due to policy limits.