Hurricane Michael, one the most intense Atlantic hurricane to make landfall in the United States, also took a hit on property insurers such as AXA’s XL unit (HECTOR RETAMAL)

Paris (AFP) – Exceptional charges along with natural disasters hacked into net profits at AXA, one of the world’s leading insurance firms, which nevertheless managed to boost its operating earnings to a record level.

Net earnings plunged 66 percent to 2.1 billion euros ($2.4 billion) at the French firm.

The drop can be primarily attributed to a number of exceptional items, such as a charges of 3.5 billion euros it took to reduce the value of AXA Equitable Holdings when it listed the US unit on the stock market and reorganise its Swiss group life business.

While the hit to net earnings was expected, the result was still less than the consensus of analyst forecasts compiled by Bloomberg at 2.3 billion euros. 

Two major natural catastrophes in the United States in the final quarter of last year — California wildfires and Hurricane Michael — meant the integration of Bermuda-based property insurer XL into AXA Group translated into a 230 million euros loss.

But AXA was able to increase its measure of operating profit to 6.2 billion euros.

“AXA delivered another year of strong operating performance with a 6 percent increase in underlying earnings, to its highest ever reported level, even with a reduced ownership of AXA Equitable Holdings, Inc. and an unusually severe fourth quarter in terms of natural catastrophes”, chief executive Thomas Buberl was quoted as saying in the earnings statement.

Gross revenues rose by 4 percent to 102.9 billion euros.

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