“Our cost-reduction program is proceeding according to plan, and we continue to focus on writing profitable business,” Thomas Buberl, the unit’s chief executive officer, told journalists yesterday evening. “The biggest step in boosting our profitability has been made, and we expect to clearly exceed last year’s operating profit.”
Axa’s German unit reported operating profit of 368 million euros ($500 million) for 2012, a decline of 7.3 percent. The Cologne, Germany-based insurer is halfway through a program to cut expenses by 328 million euros by 2015. The measures include automating and digitizing processes as well as eliminating 1,600 full-time positions, or about 16 percent.
The company will start a new life insurance product in Germany next year to lower costs from interest-rate guarantees, said Patrick Dahmen, management board member responsible for life insurance.
The move follows Allianz SE (ALV) and Ergo Versicherungsgruppe AG, the primary insurance unit of reinsurer Munich Re, which both started selling new life products in July. More details will be given in January, Dahmen said.
A run-off, or closing parts of the business to new customers, isn’t an option for Axa’s life insurance operation in Germany, Buberl said.
German life insurance premiums accounted for about 11 percent of Axa’s business in the first half of 2013 in that segment, while Germany’s share in property and casualty insurance was 14 percent.
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