(Reuters) – Axa SA, Europe's second largest insurer, beat expectations for cash and capital positions for 2020 and sent its shares higher despite a decline in earnings due to COVID-19-related receivables.
Axa had cash holdings of 4.2 billion euros ($ 5.1 billion) at the end of December, well above the target of 1 to 3 billion euros – a buffer that Credit Suisse analysts said puts the company "back in the category of of the strongly activated
Solvency II ratio – a measure of capital strength – was 200%, above analysts' expectations of 190%.
The stronger development in cash and capital helped it to reintroduce € 1.43. share ̵
In a conference call with journalists, Axas CEO Thomas Buberl expressed confidence for 2021.
Axa's shares increased after earnings, an increase of 4.28% at 1145 GMT.
But net profit amounted to EUR 3.16 billion, a decrease from EUR 3.86 billion a year earlier and well below an estimate refinitive I / B / E / S of EUR 4.4 billion.  Underlying revenue decreased by 34% while revenue decreased by 7%.
Allegations of business interruption and cancellation of events due to the new coronavirus outbreak amounted to € 1.5 billion, in line with an earlier estimate.
Axa CFO Etienne Bouas-Laurent told reporters that "good momentum" in the prices of its corporate XL unit, which was hit hard by the pandemic, would continue until the end of the year.
Mr. Buberl also said it expected revenue in Axa XL to recover this year after the unit reported a loss of 1.4 billion euros last year.
The insurer had said in November that it would inject around € 1 billion into the XL unit, which has also incurred costs arising from natural disasters.
Axa said last year that they would continue to streamline their operations by selling assets in the coming years in an attempt to increase returns.
More insurance and risk management news on the coronavirus crisis here. Catalog