THE AXA GROUP 3 1.1 Selected consolidated fi nancial data 4 1.2 Information on the Company 6 1.3 Activity report 20 1.4 Liquidity and capital resources 87
This registration document was fi led with the Autorité des marchés financiers (AMF) on March 26, 2015, in accordance with the provisions of Article 212-13 of its General Regulations. It may be used in support of a fi nancial transaction if supplemented by an information memorandum approved by the AMF. This document has been prepared by the issuer, and its signatories are responsible for its content.
The table below sets forth the total assets managed by AXA’s subsidiaries, including assets managed on behalf of third parties: (In Euro million)
Middle East. The products in these markets are offered through various distribution channels, as describe in the “Distribution channels” section below.
Also, in 2014, approximately €760 million of premiums were placed externally by AXA Global Life and AXA Global
Assets backing contracts with fi nancial risk borne by policyholders (Unit-Linked) 51,999 46,264
Germany Health - - 5 7.3 Market Factbook 2013. 2014 information not available.
France and the UK. In Southern Europe however, premium income has fallen signifi cantly driven by a shrinking demand for motor insurance as car sales reached multi-year lows. In high growth markets, growth remained robust in Asia, especially in China and India, sustained by an expanding motor market, while a signifi cant deceleration was observed in Central and
(ii) falling commodity prices drove infl ation and infl ation expectations substantially lower and (iii) expectations grew that the ECB would fi nally embark on a quantitative easing programme. This led to a performance of respectively +6% and
AXA to reinforce its presence in Poland through a partnership with mBank
(1) AXA Life Japan aligned its closing date with the Group calendar year starting with 2013 annual accounts. In the comparable basis, 2013 contribution was restated to cover January 1, 2013 to December 31, 2013 period.
■ Protection & Health APE (37% of total) was up 3% (or €+69 million) driven by (i) France (+10% or €+63 million)
or €+38 million) and (iv) AXA MPS (+15% or €+26 million)
Net investment result excluding fi nancing expenses (b) 27,917 33,254 33,249
Net income from investments in affi liates and associates 164 119 127
Gross revenues decreased by €1,778 million (-32%) to €3,801 million. On a comparable basis, revenues decreased by €59 million (-1%): ■ Protection revenues (45% of gross revenues) increased by €31 million (+2%) refl ecting a steady in-force growth in
Net technical margin rose by €2 million (+5%) to €43 million mainly due to a higher mortality margin and lower hedge losses on GMxB products, partly offset by a higher share of policyholder participation due to the above-mentioned change in regulation.
On a constant exchange rate basis, expenses increased by €4 million (+1%) mainly due to higher acquisition expenses driven by the success of the G/A Protection with Savings products in Individual Life and the distribution partnerships.
decreased by €19 million (-2%) mainly due to a decrease in run-off products in Individual Life Protection (€-11 million)
Fees & revenues increased by €57 million (+13%) to €506 million. Excluding Colombia and on a constant exchange rate basis, fees & revenues increased by €61 million (+14%)
(a) Before intercompany eliminations. Gross Revenues amounted to € 1,944 million net of intercompany eliminations as of December 31, 2014.
(i) Unit-Linked products (€+46 million) from accelerated sales before the implementation of signifi cant regulatory changes both impacting product features and reducing commission levels starting from January 1st, 2015, more than offsetting the exit from a bancassurance partnership, (ii) G/A Protection &
Underlying earnings increased by €30 million (+12%) to €282 million. On a constant exchange rate basis, underlying earnings increased by €31 million (+12%).
(b) Excluding RESO – RESO combined ratio amounted to 97.0% for 2014.
(c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, Mexico and Colombia.
Income tax expenses increased by €13 million (+10%) to €-146 million mainly due to higher pre-tax underlying earnings.
Profi t or loss on fi nancial assets (under FV option) & derivatives (0) (5)
Liability; ■ Commercial lines (45% of gross revenues) were up 1% to €1,264 million mainly driven by the Workers Compensation business.
(-2.4 points) as a result of tariff increases and lower frequency; ■ the all accident year loss ratio decreased by 0.3 point to 63.1% as a result of higher positive prior year reserve developments, partially compensated by the evolution of the current accident year loss ratio.
Net investment result decreased by €6 million (-3%) to €193 million mainly driven by lower income from fi xed income assets, partially offset by higher dividends on equities and
Net capital gains or losses attributable to shareholders net of income tax (2) (9)
with a stable acquisition expense ratio and a slightly improving administrative expense ratio down 0.1 point. High growth markets improved by 0.3 point driven by a positive volume effect while mature markets deteriorated by 0.3 point due to a negative volume effect.
Gross revenues increased by €115 million (+5%) to €2,361 million. On a comparable basis, gross revenues increased by €116 million (+5%): ■ Personal Motor (86% of gross revenues) was up €89 million
(a) Before intercompany eliminations. Gross Revenues amounted to € 853 million net of intercompany eliminations as of December 31, 2014.
Net income increased by €12 million to €26 million. On a comparable basis, net income increased by €16 million driven by the increase in adjusted earnings andlower integration costs in Hong Kong and Singapore, partly offset by integration costs related to AXA Tian Ping.
Gross revenues increased by €32 million (+2%) to €2,131 million. On a comparable basis, gross revenues decreased by €20 million (-1%) notably in Liability (-5%) mainly due to a change in payment pattern of a large contract, Aviation
to €181 million. On a constant exchange rate basis, net investment result decreased by €13 million (-7%) mainly due to lower income from fi xed income assets in a low interest rates environment, partly offset by higher dividends on equities.
exclusion in 2013, constant foreign exchange rate restatement, exclusion of distribution fees retroceded and inclusion of expenses incurred in funds.
Adjusted earnings decreased by €4 million (-2%) to €211 million. On a comparable basis, adjusted earnings increased by €36 million (+21%) in line with the increase of underlying earnings.
France Assurance, AXA Financial, AXA United Kingdom Holdings, AXA Germany Holdings and AXA Belgian Holding.
Underlying earnings decreased by €4 million to €-13 million mainly due to higher fi nancial charges.
On a constant exchange rate basis, underlying earnings decreased by €14 million refl ecting a reduction in investment income of €12 million following the reduction in investment portfolio, lower income from derivatives and a lower tax credit due to the non-repeat of one-off adjustments (€-11 million), partly offset by lower fi nancing costs and by a €10 million reduction in expenses refl ecting lower pension costs.
Adjusted earnings increased by €1 million to €-32 million mainly due to lower impairment charges on real estate funds.
intends to continue to focus on the more profi table market segments and faster growing geographies as well as delivering the planned effi ciency measures.
Costs (DAC) and net rights to future management fees only for investment contracts without DPF; ■ administrative expenses; ■ claims handling costs; ■ policyholder bonuses if the policyholder participates in the expenses of the Company.
The principal sources of funds for AXA’s insurance operations are premiums, investment income and proceeds from sales of invested assets. These funds are mainly used to pay policyholder benefi ts, claims and claims expenses, policy surrenders and other operating expenses, and to purchase investment assets.
The investment strategy of AXA’s Life & Savings subsidiaries is designed to match the investment returns and estimated maturity of their investments with expected payments on their insurance contracts. Entities regularly monitor the valuation and duration of their investments and the performance of their fi nancial assets. Financial market performance may affect the level of surrenders and withdrawals on life insurance policies, as well as immediate and projected long-term cash needs.
On a consolidated basis, AXA’s total fi nancing debt outstanding amounted to €1,586 million at December 31, 2014, an increase of €18 million from €1,568 million at the end of 2013. On a constant exchange rate basis, the decrease was €32 million.
(€1,102 million in 2013) or €1,158 million after the impact of hedging derivative instruments (€998 million in 2013), of which interest on undated subordinated debt of €479 million
The various components of what the Group considers as available capital are determined in accordance with these regulatory requirements under Solvency I, which are not yet harmonized throughout Europe while waiting for Solvency II. At
(€52.1 billion at December 31, 2013) of which: ■ consolidated shareholders’ equity after dividend proposal: €44.9 billion (€40 billion at December 31, 2013), including minority interests, but excluding reserves relating to changes in fair value through equity (available for sale assets) and undated subordinated debt; ■ gross unrealized capital gains and other: €36.2 billion
Finally, under its TSS, the Company has an option to cancel payments of interest upon the deterioration of its fi nancial position, unless certain events have occurred in the preceding year (e.g. a dividend payment or interest payment on any TSS, any share buy-back outside the Company’s share buy-back program or a repurchase or redemption of any TSS). However, upon the occurrence of certain circumstances relating to the consolidated regulatory solvency margin of the Company, the
Offi cer is well positioned to implement global strategic initiatives and represent the Group with the full spectrum of its stakeholders.
(2) Mr. François Martineau is also director of AXA Assurances IARD Mutuelle and AXA Assurances Vie Mutuelle (the “Mutuelles AXA”) that hold together more than 10% of AXA’s share capital. Considering Mr. François Martineau is a member of AXA’s Board of Directors in his personal capacity and not as a legal representative for the Mutuelles AXA, the Board considered that the independence criteria of the Afep-Medef Code related to “directors representing major shareholders of the corporation” is not applicable and that the exercise of these directorships within the Mutuelles AXA are not likely to question his independence as a director of the Company. However, in order to remove any ambiguity regarding potential confl icts of interests, Mr. Martineau is required to abstain from participating in any Board discussion and deliberation relating to the Mutuelles AXA.
These agreements or deals are generally fully negotiated and performed on arm’s length terms and conditions. Consequently,
The review of fi nancial statements by the Audit Committee is accompanied by a presentation from the Statutory Auditors stressing the essential points of the results of the statutory audit and the accounting methods chosen . The Committee also receives presentations from the Group Chief Risk Offi cer, the Group General Counsel and the Group Chief Financial Offi cer describing the Company’s principal risk exposures.
The Deputy Chief Executive Offi cer, the Group Chief Financial Offi cer, the Group Head of Audit, the Group Chief Risk Offi cer, the Group Chief Accounting Offi cer as well as the Company’s Statutory Auditors attend each Audit Committee meeting. The Group General Counsel also attends the Committee’s meetings on a regular basis.
Composition on December 31, 2014: Jean-Martin Folz, Chairman François Martineau Deanna Oppenheimer Dominique Reiniche
The Chairman & Chief Executive Offi cer is vested with the broadest powers to act on behalf of the Company and represents the Company vis-à-vis third parties. He exercises these powers within the scope of the corporate purpose and subject to the powers expressly assigned by law to the
Nicolas Moreau Chairman & Chief Executive Offi cer of AXA France also in charge of overseeing the worldwide operations of AXA Assistance and AXA Global Direct
(d) In 2014, the increase by 238 in the United Kingdom and Ireland was mainly driven by business expansion, partly offset by restructuring plans in the Wealth management business, in particular the bancassurance channel.
(e) In 2014, the decrease by 401 in Germany refl ected effi ciency programs.
Executive Offi cer, the Deputy Chief Executive Offi cer and the other members of the Executive Committee of the Group.
The variable component (comprised of a part in cash and a part in Long Term Incentive – LTI (stock options and performance shares/units)) depends on the Group’s global performance, on the benefi ciary’s local entity performance (company or business unit, depending on the case), and on the achievement of the executive’s individual objectives including demonstrated abilities for leadership. The variable portion is designed to represent a substantial component of the executive’s global compensation and, where an executive attains or exceeds the set objectives, to position the compensation levels of AXA executives between the median and the third quartile (or, in certain cases, beyond the third quartile) of the benchmark market reference.
Group’s organization to better address the needs of its clients and business, through the creation of a new Global Business
& Chief Executive Offi cer may not exceed 150% of his
“what”) and (ii) qualitative factors, including leadership abilities demonstrated by the members of the Management Committee measured against AXA’s Leadership Framework (the “how”).
Date of the Shareholders’ meeting 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005 20/04/2005
Number of options exercised at 31/12/2014 28,623 704 149,387 8,331 0 2,612 975,236 21,690 14,000 3,588
Stock options granted and/or exercised by the top 10 benefi ciaries (outside management bodies’ members) during the year
Stock options granted during the year by AXA or any eligible AXA Group’s subsidiaries, to the ten employees, outside management bodies’ members of the Company or of eligible AXA Group’s subsidiaries, who received the highest number of stock options (aggregate information)
Performance Units/Shares are designed to reward and retain the Group’s best talents by aligning their interests with the performance of the AXA Group, of their operational entity/
(a) The 2,829,352 units acquired of the March 19, 2010 plan have been settled as €36.5 million and 5,296 shares.
Denis Duverne Deputy Chief Executive Offi cer in charge of Finance, Strategy and Operations 19/03/2010 74,741 19/03/2014
Since 2007, AXA has decided to implement a shareholding policy applicable to all members of its Executive Committee.
(1) For information, the annual social security ceiling for 2015 is equal to €38,040.
Denis Duverne Deputy CEO Beginning of mandate: Term of offi ce: 2018 – X X – X – – X
employees under the 1993 collective agreement covering director-level employees of the insurance sector, but with the addition of new performance conditions in accordance with the Afep-Medef recommendations. A severance benefi t would be applicable, except in the case of gross or wilful misconduct, solely in the event of dismissal, non-renewal or resignation within 12 months following a change in the
Treasury shares held directly by the Company 49,719 0.00% [49,719] (c) [0.00%] (c) 54,079 0.00% [54,079] (c) [0.00%] (c) 57,048 0.00% [57,048] (c) [0.00%] (c)
REGULATION, RISK FACTORS Certain disclosures about market risks and related matters 3.2 RISK FACTORS 157 3.3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK FACTORS 171
This holding company legislation typically requires periodic disclosure concerning the corporation that controls the licensed insurer and other affi liated companies, including prior approval of transactions between the insurer and other affi liates such as inter-corporate transfers of assets and payment of dividends by the controlled insurer. In general, these regulatory schemes are designed to protect the interests of policyholders rather than shareholders.
Since 2008, there have been a variety of proposals with respect to executive compensation practices at financial institutions including from the Financial Stability Board (“FSB”)
July 24, 2014 with a published effective date on January 1st, 2018) may signifi cantly affect the accounting of policyholders’
During 2014 the litigation environment continued to evolve, particularly in continental Europe, with the introduction of a class action system in France and certain other European jurisdictions that is likely to increase litigation risks and costs for insurers, asset managers and other fi nancial institutions.
Since 2008 the capital and credit markets have experienced high levels of volatility and disruption which, during certain periods, have signifi cantly limited the availability of additional liquidity in the markets and credit capacity for most issuers including AXA.
regulations, a consolidated solvency margin ratio which represents the Company’s total available capital as compared to its required regulatory capital. Under applicable French regulations, 100% is the minimum required consolidated solvency margin for the Company. On December 31, 2014 the Company’s consolidated solvency margin was 266%
During periods of declining interest rates: ■ life insurance and annuity products may be relatively more attractive to consumers due to minimum guarantees in these products, resulting in increased premium payments on products with fl exible premium features, and a higher percentage of insurance policies and annuity contracts remaining in force from year-to-year, creating asset- liability duration mismatches; ■ we may be required to increase provisions for guarantees included in life insurance and annuity contracts, as the guarantees become more valuable to policy holders and surrender and lapse assumptions require updating; and
(iii) actual claims payments signifi cantly exceeding associated insurance reserves which would negatively impact our results of operations. A failure to accurately anticipate higher infl ation and factor it into our product pricing assumptions may also result in a systemic mispricing of our products resulting in underwriting losses which would negatively impact our results of operations.
Equitable utilizes a captive reinsurer, AXA RE Arizona, as part of its capital management strategy. In addition to the regulatory developments discussed above, in 2014, a lawsuit was fi led against AXA Equitable on behalf of a purported class of persons who purchased certain insurance or annuity contracts alleging, among other things, that AXA Equitable’s use of a captive reinsurer violated certain provisions of the New York insurance law. We cannot predict what, if any, changes may result from these regulatory reviews or the potential impact, if any, of this lawsuit. If the NYDFS or other state insurance regulators were to restrict the use of such captive reinsurers or if AXA Equitable otherwise is unable to continue to use a captive reinsurer, the capital management benefi ts received under this reinsurance arrangement could be adversely affected. In
The establishment of insurance reserves, including the impact of minimum guarantees which are contained within certain of our v ariable a nnuity products, the adequacy test performed on the reserves for life policies (which encompasses the recoverability of DAC, Value of Business In-force and deferred participations assets) and the establishment of DAC,
Note 14.7 to AXA’s consolidated fi nancial statements included in Part 4 of this Annual Report.
The sensitivities of the Group EV to changes in major economic assumptions were calculated as follows for the 2013 and 2014 values: ■ upward shift of 100 basis points (bps) in reference interest rates which simulates a sudden shock to the initial conditions. This means changes to: 1) the current market values of fi xed-interest assets, with related possible changes to projected capital gains/losses and/or fee revenues, 2) future reinvestment rates for all asset classes, and 3) riskdiscount rates. Infl ation rates are not changed; ■ downward shift of 100 basis points in reference interest rates which is the same as above but with a shift downward.
& Savings business of 4% to upward 100 bps and -10% to downward 100 bps (2013: 3% and -9%) show an asymmetry mainly driven by guaranteed interest rates having higher value when interest rates decrease, while higher reinvestment returns would need to be shared with policyholders limiting shareholders’ gains in a higher rate environment. However this classical pattern is not followed everywhere, as for certain type of business with signifi cantly low interest rate guarantees, the
At the end of 2014, these countries accounted for 97% of the
Group’s Life & Savings companies’ assets (99% at the end of 2013).
In the Mediterranean, Latin American Region and Belgium, the Group’s Property & Casualty companies do not have any signifi cant exposure to exchange-rate risk.
HK Dollar 7.4 - 0.8 - In respect of the Hong Kong activities, in the form of derivatives
AXA SA’s assets accounted for the biggest part of the Group holding companies assets at the end of 2014.
participation, deferred acquisition cost and value of purchased business in force. Net amounts may evolve depending on the timing of realization of these potential gains and on the local regulatory environment.
At December 31, 2014, AXA’s invested assets included a net exposure to US subprime residential and Alt-A mortgage loans of approximately €0.8 billion (5% equalling or above AA rating).
At year end 2014, total invested assets of the banking segment amounted to €35.1 billion (€32.7 billion in 2013).
As such, AXA banks risk management policies are based on their stated Risk Appetite, with the following key principles: ■ dedicated counterparty and credit risk functions with appropriate committees; ■ quality sovereign, international institutions and bank counterparties portfolio closely monitored; ■ adequacy to Group risk standards; ■ tightly managed market, asset & liability, foreign exchange and interest rate risks including a strict collateral policy.
The Group’s insurance subsidiaries have the primary responsibility to manage their insurance risks linked to underwriting, pricing and reserving, using a set of actuarial tools. They are also responsible for managing appropriately in response to changes in insurance cycles and to the political and economic environments in which they operate.
In addition, in the Property & Casualty business, the above mentioned tools also enable analyses on a worldwide basis of market cycle, price elasticity, reinsurers’ counterparty risk, claims frequency deviation, reserves adverse development and natural catastrophes, also based on the output of the internal model. The results of this exercise are mainly used to optimize the Group’s protection (through reinsurance or securitization)
Reinsurance purchasing is an important part of the Group’s insurance and risk management activities.
Assumptions are made following discussions with claims managers, pricing actuaries, underwriters and other specialized departments.
Group’s Life & Savings technical reserves cover separateaccount (Unit-Linked) products that do not materially affect
AXA has defi ned a framework to identify and measure its operational risks that may arise from a failure in its organization, systems and resources or from external events. Ensuring an adequate mitigation of these risks across the Group is a key pillar of the Risk Management functions.
By developing relationships with researchers and supporting innovative projects in environmental risks, the AXA Research
I Governance of Investment strategy and asset & liability management (ALM)
(Risk appetite, Internal model…). Such monitoring is designed to ensure market risks, coming either from cash or derivative instruments, are properly controlled and remain within approved limits.
Disposal of subsidiaries and affi liated companies, net of cash ceded 40 364
■ IFRS 12 – Disclosures of Interests in Other Entities requires enhanced disclosures for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.
Derivatives and Continuation of Hedge Accounting, published on June 27, 2013 provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria.
December 12, 2013 July 1, 2014 Collection of amendments to IFRSs in response to issues that are not part of a major project.
whenever such directly observable data are available and valuations are adjusted for liquidity and credit risk.
(DOC) (see Note 7) but limited to incremental costs directly attributable to the provision of investment management services. This asset is amortized by taking into account projections of fees collected over the life of the contracts. The amortization of DOC is reviewed at each closing date to refl ect changes in assumptions and experience. This asset is also tested for recoverability.
equity; ■ loans and receivables (including some debt instruments not quoted in an active market) accounted for at amortized cost.
AXA Vida, S. A. de Seguros (Spain) Minority interest buyout 99.84 99.84 99.82 99.82
“Minority interests of consolidated investment funds”. As of December 31, 2014, minority interests in consolidated investment funds amounted to €10,241 million (€7,795 million as of December 31, 2013).
Given the activities of AXA, the operating results are presented on the basis of fi ve operating business segments: Life &
Net investment result excluding fi nancing expenses 27,272 2,181 318 54 - 550 (565) 29,810
Net income from operating activities before tax 4,554 2,606 390 831 (53) (1,201) - 7,128
The total goodwill Group share amounted to €14,906 million as of December 31, 2014 and €13,795 million as of
AXA MPS (Italy) Property and Casualty 2007 & 2008 347 - - 347 347 - - 347
Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges)
Loans designated as at fair value through profi t or loss (a) - - -
Debt instruments available for sale 320,720 (788) 319,932 51,802 371,734 306,962 (1,078) 305,884 23,104 328,988
Impairment – Non consolidated investment funds 1,027 101 (91) - (7) 1,029
The breakdown by valuation method of investments recognized at fair value excluding derivatives (detailed in Note 20.3 and
(ii) values provided at the request of the Group by pricing services and which are not readily publicly available; ■ assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market transactions and observable data.
TOTAL FAIR VALUE OF INVESTED ASSETS AT AMORTIZED COST 47 51,281 38,983 90,311 1,286 46,955 33,765 82,006
These assets (including investment in real estate properties) are measured at fair value through profi t or loss. Financial assets included in these investments are valued at fair value through profi t or loss under the fair value option.
Current accounts receivables from other Companies 1,502 (1) 1,501 1,501 1,504 (10) 1,493 1,493
Receivables from policyholders, brokers and general agents 8,357 (336) 8,021 8,021 8,005 (304) 7,701 7,701
The tables above exclude cash held by consolidated investment funds in the “Satellite Investment Portfolio”, as defi ned in Note 1.7.2.
Net cash relating to fi nancing activities totalled €-4,128 million in 2014 mainly driven by: ■ Undated subordinated debt issued for of €+997 million (net of fees) and an early redemption call of €-35 million; ■ Financing debt with a repayment of €2,122 million subordinated debt maturing in 2014 and €809 million of Euro senior Note due on 2014 and an issuance of £750 million
Unrealized gains and losses (net of tax) – Equity accounted companies 140 8
The group share translation reserves movement (€2, 361 million) was mainly driven by Japan (€-1,424 million), the United States (€-416 million), the United Kingdom (€105 million) and Switzerland (€-134 million), partly offset by the Company (€+370 million), driven by change in fair value of derivatives and debt hedging net investments in foreign operations.
TOTAL LIABILITIES ARISING FROM INSURANCE CONTRACTS, NET OF REINSURANCE CEDED 436,121 51,411 7,338 494,869 400,753 48,877 6,668 456,297
Reinsurers’ share in change in reserves relating to technical and actuarial items (+/-) (b) 144 2 146 (298) - (299)
14.8. LIABILITIES AND ASSETS ARISING FROM POLICYHOLDERS’ PARTICIPATION AND OTHER OBLIGATIONS
In 2014, debt relating to investments under lending agreements and equivalent in banking activities amounted to €8,375 million
Refi nancing with central banks 150 180 - 330 - - - -
Derivative instruments hedging fi nancing debt are commented in Note 20.
Effective maturities may differ from those presented, mainly because some instruments include clauses allowing early redemption, with or without penalty.
Income from operating activities, gross of tax expenses (excluding result from investments consolidated using equity method) 7,201 6,109
(b) The movements through shareholders’ equity mainly concern net investment hedge in the Company, revaluation to fair value of fi nancial investments through shareholders’ equity and employee benefi ts actuarial gains and losses.
Variable Annuity products, mainly in the United States mostly coming from Interest Rate Swaptions in order to hedge the risk associated with potential increasing interest rate scenarios, and (ii) increase of interest rate hedging through entering into new swaptions, Interest Rate Swaps and
AXA mainly uses (i) interest rate Swaps (57% of total notional amount of interest rate derivative instruments), (ii) interest rate options (26%), and (iii) futures and forwards (15%).
Europe, in order to manage an interest rate exposure between its interest-earning assets and interest-bearing liabilities mainly by interest rate swaps (notional value of €15.6 billion in 2014 versus €15.3 billion in 2013).
In 2014, the notional amount of credit derivatives held by the
Liabilities arising from banking activities 37,640 (239) 37,402 35,513 (138) 35,375
Non quoted debt instruments (amortized cost) 3 - - - 3
Non consolidated investment funds designated as at fair value through profi t or loss 305 - (7) - 298
Other assets held by consolidated investment funds designated as at fair value through profi t or loss 376 - 21 - 397
Net transfer In/(Out) (including acquisitions and disposals) - (1) - - - (1)
Consistently with IAS 19 requirements, the roll-forward of the statement of fi nancial position liability from January 1, 2014 to
Statement of fi nancial position liability at the beginning of the year (7,261) (8,783) (542) (700) (7,802) (9,484)
As pension liabilities have a long-term nature, a mix of equity instruments, debt instruments and other investments is used in plan assets.
The cost of this plan is valued taking into account the fi veyear lock-up period, as recommended by the ANC (Autorité
Ambition AXA: (1) an increase in underlying earnings per share or (2) an increase in the Group’s customer satisfaction index
In 2014, the valuation was based on a market price of €18.52 per share at grant date and an estimate 5% pre-vesting lapse rate per year. The grant date average fair value of Performance
Mutuelles AXA. The agreement includes provisions designed to ensure the legal independence and protection of the respective client portfolios of the Mutuelles AXA and these Subsidiaries.
(e.g. fi nance, accounting and reporting, tax, legal, marketing and brand, internal audit, human resources, procurement, information systems, risk management, cash management) as well as certain other services. Expenses invoiced by these GIEs to the Company and its subsidiaries are generally invoiced at cost and are included in the consolidated expenses refl ected in the Company’s audited consolidated fi nancial statements.
Certain of these guarantees are given by the Company for the benefi t of its subsidiaries and affi liates for various business purposes including to promote development of their business (e.g. to facilitate acquisitions, integration of acquired businesses, distribution arrangements, off-shoring arrangements, internal restructurings, sales or other disposals of assets or businesses, sales or renewals of products or services or similar transactions), to support their credit ratings, and/or to promote effi cient use of the Group’s capital resources.
(€1,231 million) and Belgium Life & Savings (€828 million); ■ other pledged assets/collaterals totaled €2,296 million mainly in AXA Bank Europe (€1,996 million) due to securities in its own investment portfolio given as collateral for derivative instruments.
Membership in a professional body: PricewaterhouseCoopers Audit is registered as an independent auditor with the Compagnie Régionale des Commissaires aux
In June 2014 an action was fi led against AXA Equitable Life
Variable Annuity contracts. These suits assert a single claim for breach of contract which alleges that AXA Equitable breached express provisions of the contract by failing to comply with New York State law when it implemented this strategy. Damages sought are not quantifi ed. AXA Equitable believes that it has strong defenses to these claims and will defend them vigorously.
In April 2014 an action was fi led against AXA Equitable Life
Versailles ruled against ERDF in one of these law suits and, as part of this decision, ruled that AXA CS was liable to ERDF
AXA and its subsidiaries are subject, from time to time, to examinations, investigations, enforcement proceedings and other actions by regulatory and law enforcement authorities
CONSOLIDATED FINANCIAL STATEMENTS 4 4.7 REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS
“Regulation, Risk Factors, Certain d isclosures about m arket r isk and r elated m atters” and Part 4 – “Consolidated Financial
The Board of Directors determines the Company’s business strategy and oversees its implementation. The Board considers any question related to the proper functioning of the Company and takes all appropriate decisions for its business. The Board of Directors undertakes all controls and verifi cations it deems appropriate.
Committees have a critical role in reviewing fi nancial results and other fi nancial information prepared by the management, fi nancial reporting and control processes, critical accounting policies, particular accounting issues, key risks and systems of internal control, fraud and similar issues.
Group’s operating businesses, consider strategic initiatives and other subjects the Executive Management deems appropriate from time to time. The Executive Committee usually meets four times a year.
This system is also used to deliver management reporting information used to produce an economic perspective on the consolidated fi nancial statements and the economic balance sheet. The process through which this management reporting information and economic balance sheet is produced and validated is the same as the one used to prepare consolidated fi nancial information.
Support and Development Program is a structured program of on-going reviews with the Group operating companies around the world that is designed both to review signifi cant c ompliance issues and processes as well as the quality of the
At each year-end, the in-scope AXA Group companies are required to perform an evaluation of their ICOFR as part of an internal certifi cation process. This process involves formal sign-off by the Company’s process owners and culminates with a formal management report from the Company’s CFO
We conducted our work in accordance with the professional standards applicable in France.
Information concerning internal control and risk management procedures relating to the preparation and processing of fi nancial and accounting information
APPENDICES A APPENDIX II MANAGEMENT’S ANNUAL EVALUATION OF INTERNAL CONTROL OVER FINANCIAL REPORTING
AXA’s ICOFR in accordance with the IFC Standard as described above. Based on this evaluation, management concluded that
internal control over fi nancial reporting as of December 31, 2014, in order to be able to obtain reasonable assurance as to whether
AXA’s authorizations to issue shares or other types of securities that were valid as of December 31, 2014 are summarized in the tables below: Issues with preferential subscription rights for shareholders
Maximum nominal amount of the capital increase (in Euro) Term Expiration date
Capitalization of reserves, earnings or premiums - 1 billion (a) 26 months June 30, 2017
At December 31, 2014, total assets amounted to €73,270 million, versus €73,281 million at December 31, 2013.
Shareholders’ equity, before net income for the period and after payment of the dividends relating to the prior year, came to €41,311 million. This represented an increase of €370 million, including €313 million through a capital increase reserved for employees and €53 million following the exercise of stock options.
Profi t on ordinary activities before tax (VI = III + IV + V) 1,770 1,761
Ul, Svetlanskaya, 250/1, Vladivostok,Primorsky Territory Far Eastern federal district, 690000 Russian Federation
Income tax expense (b) - 646 646 * A positive sign indicates tax benefi t.
Employee shareholders represented 6.66% of the outstanding share capital and 8.86% of the voting rights as of
Moreover, to foster a culture of inclusion within AXA for our
Average length of service of salaried workforce 11.2 yrs 11.4 yrs
Number of employees with disabilities - concerns entities operating in France only 857 emp. 767 emp.
■ Number of re-hires in the Company 417 emp. 370 emp.
■ Number of fi xed-term contract transformed into open-ended contract 119 emp. 121 emp.
Turnover rate of salaried sales force 27.7 % -3.2pts 30.9 %
■ Proportion of long term sick absences 12.1 % 15.8 %
■ Proportion of long term sick absences 9.6 % 13.8 %
(b) The majority of this increase is due to the acquisition of 51% of Colpatria’s insurance operations in Colombia (81.4% as a proportion on total increase).
(e.g. procurement, IT, marketing, HR) worked closely to set ambitious 2020 targets which will steer AXA to a more sophisticated and embedded environmental strategy. As a result, AXA set a new Global Key Performance Indicator (KPI)
Our ambition is to become a proactive leader on climate change, in particular in the scope of the major events that will take place in 2015 such as the new United Nations “Hyogo framework for action” on disaster risk reduction (Sendai,
Agreement. The Group also showed its renewed commitment towards promoting research and education to help better understand, protect against and prevent climate risks through the AXA Research Fund that will dedicate €35 million to climate risk research by 2018 but also through the AXA-CARE
(k) Unsorted wasted covers 71,596 FTEs, which is low as many entities are currently unable to monitor this waste fl ow.
October 2013 with the introduction of an airtime-based insurance service sold in collaboration with the mobile network operator MTN Nigeria.
Principles for Responsible Investment (UN PRI) signatory since 2007. AB signed the UN PRI in 2011 and the AXA Group in 2012.
The Board of Directors is responsible for preparing the Company’s management report including CSR Information in accordance with the provisions of Article R.225-105-1 of the French Commercial Code and with the Social Data Report referential, the Environmental
Code (Statement of completeness of CSR Information); ■ express limited assurance that the CSR Information, taken as a whole, is, in all material respects, fairly presented in accordance with the Guidelines (Reasoned opinion on the fairness of the CSR Information).
We verifi ed that the CSR Information covers the scope of consolidation, i.e., the Company, its subsidiaries as defi ned by
Based on our work, nothing has come to our attention that causes us to believe that the CSR Information, taken as a whole, is not presented fairly, in all material respects, in accordance with the Guidelines.
■ Energy consumption and measures taken to improve energetic effi ciency and the use of renewable energy, including indicators electricity, gas, fuel, steam and chilled water consumption per person.
emission resulting from onsite power consumption, paper and business travel per person.