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Monday, 12 February, 2001, 17:48 GMT
Axa: Sales up, profits down
Axa Insurance logo
Axa: Difficult stock market conditions took their toll
Axa Financial, the US arm of the world's largest insurer, saw its profits fall 3.5% in the last three months of 2000.

Fourth quarter profits fell to $223m (153.6m, 240m euros) from $231m a year previously.

But the fall came despite a 18% increase in product sales, bringing its fourth quarter revenue up to $1.44 bn.

Axa Financial blamed the difficult stock market conditions for the dwindling profits.

Depreciation

"Equity market depreciation had a direct impact on asset growth and investment income in the fourth quarter," admitted chief operating officer Michael Hegarty.

Last year, the Nasdaq composite, the main US technology index, declined 39.3%, the UK's FTSE 100 index lost 10.2% and Tokyo's Nikkei 225 plummeted 27.2%.

This means that any money Axa invested into funds based around these indexes would have decreased rather than grown.

Axa Financial owns US life insurer Equitable Life and has a majority stake in asset manager Alliance Capital.

Rising demand

The whole Axa group which spans Europe, the US, Japan and Australia reported that its full year sales rose 20% because of strong demand for life and savings products.

And full year revenue for the whole group rose to a massive 80.1bn euros (51.32bn, $74.48bn)

But despite soaring revenue, the group has not yet reported whether it will suffer the same fate as its US arm and see profits fall because of stock market losses.

The Axa group reports its full year profits in the middle of March.

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See also:

25 Jul 00 | Business
Axa promises 525m windfall
21 Dec 00 | Business
High Court victory for Axa
24 Nov 00 | Business
Insurers in sights of German giant
02 Jan 01 | Business
A gloomy year for stock markets
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