CONSOLIDATED FINANCIAL STATEMENTS 187 4.1 Consolidated statement of fi nancial position 188 4.2 Consolidated statement of income 190 4.3 Consolidated statement of comprehensive income 191 4.4 Consolidated statement of changes in equity 192 4.5 Consolidated statement of cash fl ows 196 4.6 Notes to the Consolidated Financial Statements 198 4.7 Report of the Statutory Auditors on the consolidated fi nancial statements 330
Board of Directors and are presented in the table on page 399 of this Annual Report).
(d) Individual shareholders who were residents of France for tax purposes were eligible for a tax relief of 40% on the dividend, i.e. €0.28 per share for fi scal year 2011.
The table below summarizes certain key fi nancial data by segment for the last two years.
(b) Mediterranean & Latin American Region includes Spain, Italy, Portugal, Turkey, Greece, Morocco and Mexico.
The table below presents consolidated gross written premiums (after inter-segment elimination) and gross insurance liabilities by major product: G ROSS WRITTEN PREMIUMS & INSURANCE LIABILITIES PER PRODUCT LINE
Company’s products on an exclusive basis; ■ Direct sales relate to all sales made through mail, telephone or internet; ■ Brokers are independent fi rms that negotiate with insurance companies, in return of a commission, on behalf of customers seeking coverage. As opposed to exclusive agents, brokers usually work with different insurance companies; ■ Independent Financial Advisors (IFAs) are individuals or fi rms that provide fi nancial advice to customers and negotiate related policies with insurance companies on behalf of customers. IFAs usually work with different insurance companies; ■ Aligned distributors are independent individuals or fi rms who have chosen AXA to provide them with a full range of dealership services. They negotiate, on behalf of customers, policies of various insurance companies among a range of products selected by AXA; ■ Distribution partnerships are generally structured as sales agreements between an insurance company and another company from the fi nancial services industry, especially banks, or from other industries. This may take the form of a joint venture between the insurance company and its partner or a pure contractual distribution arrangement.
For additional information on markets, see section “Insurance and Asset Management Markets” included in Section 1.3
(Marine, Aviation, Space) worldwide; ■ AXA Global Life and AXA Global Property & Casualty are two intra-Group reinsurance companies in charge of analysis, structuring and placement of reinsurance treaties on behalf of AXA Group insurance companies after a selection of third party reinsurers. AXA Global P&C activity is mainly driven by its Property pool which provides AXA entities with cover on natural catastrophes; ■ AXA Assistance is the Group subsidiary committed to helping its customers in diffi cult situations. AXA Assistance operates through four Business Lines (Vehicle, Travel, Health and Home) to offer customer focused services; ■ AXA Liabilities Managers is the Group’s specialized unit in charge of managing the AXA Group’s Property & Casualty run-off portfolios; ■ AXA Corporate Solutions Life Reinsurance Company is a reinsurance company in the United States, in run-off , notably managing a book of reinsurance contracts of Variable
France 3 8.7 3 8.9 FFSA as of January 30, 2014 for 2013 data; FFSA as of January 24, 2013 for 2012 data.
Switzerland 1 30.0 1 28.9 SIA (Swiss Insurance Association) as of February 2014 for 2013 February 2013 for 2012; Market share is based on statutory gross written premiums.
Please fi nd below AXA’s ranking and market shares in the main countries where it operates: SourcesRanking Market share (%) Ranking Market share (%)
Mexico 1 13.0 1 13.8 AMIS (Asociacion Mexicana de instituciones de Seguros) as of September 30, 2013 and 2012.
From a strategic standpoint, both retail and institutional investors turned to solutions that better manage the volatility of their portfolios, offer diversifi cation benefi ts, capture market returns more effi ciently or capture the illiquidity premiums.
Managers ranked 16th (2) and AllianceBernstein 23rd (2) based on volume of assets under management. On a combined basis,
The transaction values AXA Private Equity at Euro 510 million for 100% before transition costs. The AXA Group intends to continue to invest in AXA Private Equity funds, with an expected total commitment of approximately Euro 4.8 billion between 2014 and 2018, as the fi rm pursues its purpose of supporting the growth of French and European companies and investing responsibly for clients around the world.
to sell MONY Life Insurance Company (“MONY”) and to reinsure an in-force book of life insurance policies written by
(5) Based on information furnished by Colpatria and on Superintendencia Financiera de Colombia publicly available information.
The spread to be paid by AXA Global P&C during the risk period has been set initially at 260 basis points per annum for the Class A notes, and at 290 basis points per annum for the
(€-0.1 billion or -0.1 point), (iii) the impact of the acquisition of HSBC P&C operations (€+0.3 billion or +0.3 point), (iv) the acquisition of ERGO DAUM in South Korea in 2012 (€+0.1 billion or +0.1 point) and (v) the alignment of closing dates in Japan (1)
(ii) G/A Protection & Health sales (-2% or €-10 million) as the successful launch of a new disability product was fully offset by lower Protection with Savings sales following product repricing driven by a change in regulation.
International Insurance revenues were up 5% on both reported and comparable basis to €3,143 million mainly driven by (i) AXA
due to higher loadings on premiums stemming from new business and in-force growth, (iv) Japan (€+33 million) due to higher loadings refl ecting a better business mix and increased retention,
• other revenues were up €35 million mainly driven by higher Mutual funds product fees in the United States; ■ higher net technical margin (€+376 million or +106%) mainly attributable to (i) the United States (€+516 million) stemming from (a) the non repeat of 2012 reserve strengthening for
• €-3 million higher administrative expenses as infl ation and business growth effects were offset by ongoing cost management efforts; ■ higher tax expenses and minority interests (€-124 million or +16%) driven by higher pre-tax underlying earnings and less favorable tax one-offs (€-116 million vs. 2012 mainly in the United States, Japan, the United Kingdom and Hong
and Direct (€+35 million) mainly resulting from: ■ higher net technical result (€+349 million or +54%) driven by: • current year loss ratio improving by 0.8 point as a result of tariff increases and lower claims frequency, partly offset by higher severity and a higher Nat Cat charge (+0.4 point to 0.8%) that amounted to €244 million mainly as a result of fl oods in Bavaria and Saxony (€53 million charge at Group level) and several other hailstorms and windstorms during the second semester, in particular Norbert (€69 million)
(i) Germany (€+28 million) from an exceptional distribution from credit funds and (ii) the Mediterranean and Latin
due to a rise in net operating revenues in a context of lower remuneration of deposits and lower administrative expenses.
As a result, adjusted earnings amounted to €5,162 million. On a constant exchange rate basis, adjusted earnings increased by €875 million (+20%).
(+14%) mainly as a result of: ■ higher adjusted earnings (€+875 million); ■ higher impact from exceptional operations (€+129 million)
AXA’s Life & Savings segment for the periods indicated: (in Euro million)
(c) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco and Mexico.
On a constant exchange rate basis, expenses increased by €592 million: ■ expenses excluding DAC amortization increased by €35 million to €1,236 million driven by higher asset based commissions on higher balances and mutual fund product sales partially offset by continued productivity actions
AXA Life Japan aligned its closing date with the Group calendar year starting with 2013 annual accounts. Therefore, its contribution to the AXA consolidated result for the 2013 annual accounts exceptionally covered a period of fi fteen months.
to €138 million, due to the non recurrence of strong sales in the previous year driven by brokers’ anticipation of a change in regulation capping their commissions effective April 2012.
Gross revenues increased by €516 million (+8%) to €7,067 million (1). On a comparable basis, gross revenues increased by €644 million (+10%): ■ Group Life revenues increased by €531 million (+9%) to €6,042 million driven by higher premiums from full protection scheme contracts (€+564 million) as a result of strong business from both new and existing clients; ■ Individual Life revenues increased by €113 million (+12%)
Expenses decreased by €16 million (-6%) to €-249 million. On a comparable scope basis, expenses decreased by €6 million
Gross revenues decreased by €83 million (-18%) to €389 million (1). On a comparable basis, gross revenues decreased by €77 million (-16%) mainly driven by the change in accounting (transfer to off-balance sheet) of the “Transformed
to €20 million) partly offset by lower production of Unit-Linked products in a still diffi cult economic environment.
VBI decreased by €7 million (-52%) mainly driven by the nonrepeat of some negative adjustments of actuarial assumptions in 2012 (€4 million).
Adjusted earnings decreased by €22 million (-8%) to €251 million. On a constant exchange rate basis, adjusted earnings decreased by €15 million (-5%) as higher underlying earnings (€+6 million) were more than offset by lower net realized capital gains.
(b) Excluding RESO - RESO combined ratio amounted to 98.9% as of December 31, 2013.
(c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, Mexico and Lebanon.
Adjusted earnings increased by €19 million (+3%) to €563 million driven by higher underlying earnings, lower impairments (€+19 million) mainly on equities, refl ecting the improved market conditions, as well as an increase in the impact of equity hedging derivatives (€+45 million), partly offset by lower realized capital gains (€-90 million) mainly on equities and fi xed income assets.
to €1,358 million. Property was down 23% to €476 million principally due to the impact on volumes of tariff increases and exiting of unprofi table schemes within the UK. Health was up 4% at €621 million following further growth in both the UK
due to a lower Nat Cat charge (-0.7 point) and lower large losses in Property (-1.1 points) mainly refl ecting lower charges related to weather events. Further decreases refl ect improved margins in Healthcare (-0.5 point) and lower claims handing costs following change in business mix towards
Expense ratio increased by 0.5 point to 30.6%. The administrative expense ratio was up 0.9 point to 9.1%, refl ecting lower revenues and increased costs from IT investments, notably driven by the impact of the expansion of the direct-toconsumer network within Health business, partly compensated by savings from expense effi ciency programs. The acquisition expense ratio was down 0.4 point to 21.5% refl ecting a shift in business mix towards lower commissioned products and channels.
Net capital gains or losses attributable to shareholders net of income tax 6 17 17
to €207 million. On a constant exchange rate basis, net investment result decreased by €7 million (-3%) mainly driven by lower investment yields on fi xed income assets.
Income tax expenses decreased by €+1 million (-1%) to €98 million. On a constant exchange rate basis, income tax expenses remained stable.
Gross revenues increased by €285 million (+4%) to €7,391 million (1). On a comparable basis, gross revenues increased by €393 million (+6%) driven by an acceleration in high growth markets (+15% or €+502 million), partly offset by a decline in mature markets (-3% or €-109 million) principally in Spain which is continuing to suffer from a diffi cult economic environment: ■ Personal lines (56% of the gross revenues) were up 3% to €4,198 million driven by Motor lines (+4% or €+117 million)
and Spain (-10% or €-21 million). This refl ects higher new business and increased market fl uidity across the board, partly offset by lower average premium together with increased competition in the UK and Spain; ■ Personal Non-Motor (13% of gross revenues) was up €27 million (+10%) to €299 million mainly supported by both volume and tariff increases in France and volume increases in South Korea.
On a constant exchange rate basis, net income increased by €93 million (+106%) due to the increase in adjusted earnings and lower restructuring costs.
Net income increased by €178 million (+80%) to €401 million, including €220 million from AXA PE (in particular net realized gain from AXA PE sale) for the fi rst nine months of 2013. On a comparable basis, net income increased by €16 million (+10%), in line with the adjusted earnings improvement.
Net banking revenues increased by €37 million (+39%) to €131 million. Operating net banking revenues (1) increased by €25 million (+24%) mainly due to lower interests paid to customers on savings accounts following the non repeat of the promotional campaign during the fi rst half of 2012, as well as higher interest income on retail loans (primarily mortgages) as a consequence of increasing in-force business following the strong level of new credit production during the last two years.
Adjusted earnings increased by €14 million to €-4 million. On a constant exchange rate basis, adjusted earnings increased by €14 million in line with the improvement in underlying earnings.
■ change in UFR (Unearned Fees Reserve - capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues & fees” in the underlying
Underlying Expenses are: ■ acquisition expenses, including commissions and general expenses allocated to new business, related to insurance products as well as to other activities (e.g., mutual fund sales); ■ capitalization of acquisition expenses linked to new business: Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without
Since January 2007, AXA’s only convertible debt outstanding is AXA’s 2017 convertible bonds, (6.6 million bonds at
December 31, 2013 representing a carrying value of €1,549 million for its debt component in Note 17 of Part 4 -
At December 31, 2013, the amount of debt owed by AXA and its subsidiaries to credit institutions was €853 million versus €831 million at the end of 2012. The increase was €22 million, or €43 million at constant exchange rate basis.
Special report of the Statutory Auditors on regulated agreements and commitments 145 2.4 THE OFFER AND LISTING MARKETS 149
In the context of these discussions, the Board of Directors concluded that the re-appointment of Mr. Henri de Castries as
Chairman of the Board of Directors as well as Chief Executive
The Board considered that these factors when taken together and considered as a whole make Mr. de Castries uniquely qualifi ed for the role of Chairman of the Board of Directors and
The Company’s Charter and Board of Directors’ Bylaws provide for the mandatory appointment of a Vice-Chairman acting as
The time spent by the Lead Independent Director on his activities within the AXA Group represents approximately 45 full days of work.
France. This internationalization encourages open debates within the Board and brings a larger perspective to the discussions.
Stefan Lippe (58) Co-founder and Chairman of the Board of Directors of Paperless Inc. (Switzerland) and co-founder and Vice-Chairman of the Board of Directors of Acqupart Holding AG (Switzerland) and Acqufi n AG (Switzerland) Baarerstrasse 8 - CH 6300 Zug - Switzerland German nationality
The scope of the Audit Committee’s responsibilities is set out in its Terms of Reference which are reviewed and approved each year by the Board of Directors. The Audit Committee assists the oversight of the: ■ adequacy and effectiveness of the internal control and risk management frameworks; ■ fi nancial reporting process and the integrity of the publicly reported results and disclosures made in the fi nancial statements; ■ effectiveness, performance and independence of the internal and external auditors.
Directors unanimously decided to propose the re-appointment of Mr. Denis Duverne as Director at the next Shareholders’
On January 1st, 2014, the Executive Committee was comprised of the following nineteen members, including eleven non-French nationals: Name Principal function within AXA
(f) Some employees of AXA Bank Belgium provide services in common for both the insurance activities and the banking activities. Consequently, split is not available. In 2013, decrease by 264 in Belgium mainly following effi ciency programs.
(i) In 2013, decrease by 291 in AXA Investment Managers mainly following the sale of a majority stake in AXA Private Equity.
(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.
Solvency II return) and customer scope index. The relative weight of these three indicators is, respectively, 65%, 20%
Nicolas Moreau, Mark Pearson and Jacques de Vaucleroy) is based 20% on the Group performance, 30% on the results of their operational entity and/or functional area of responsibility, and 50% on their individual performance.
Shareholders’ Meeting of April 30, 2013 at €1,350,000, compared to a previous amount of €1,200,000. The purpose of this increase is for the level of directors’ fees allocated by the
Subscription or purchase price of options (a) 20.97 27.75 27.93 27.93 28.03 28.03 29.59 32.95 33.78 33.78
Performance Units/Shares are designed to: ■ reward and retain the best talents by aligning their interests with the performance of the AXA Group, of their operational entity/business unit as well as the stock performance of the
Acquisition date of the Performance Units 20/03/2011 02/04/2011 10/06/2011 19/03/2012 18/03/2014 04/04/2014 16/03/2015 13/06/2013 22/03/2016
Grant date (Board of Directors or Management Board) 20/03/2009 10/06/2009 19/03/2010 18/03/2011 16/03/2012 22/03/2013
Alliance Bernstein shares * This amount includes the part of the variable compensation with respect to 2012 which has been deferred in accordance with the mechanism described on page 118 . The total amount paid will depend on performance conditions and may then vary.
Group (for 24 years and 18 years, respectively on the date of this Annual Report) and had the same social benefi ts as all other director-level employees of AXA in France (with no special benefi ts or arrangement designed specifi cally for them), and (ii) was concerned that the decision of Messrs. de Castries and Duverne to renounce their employment contracts in accordance with the recommendations of the Afep-Medef
Board with regard to the insurance industry and the ratings of AXA’s principal competitors. The amount of severance benefi t to be paid to the benefi ciary would be adjusted in accordance with the level of achievement against these performance conditions: (1) 100% of the severance benefi t will be paid if at least 2 of the 3 performance conditions are met; (2) 40% of the severance benefi t will be paid if only 1 performance condition is met; and (3) no severance benefi t shall be paid if none of the performance conditions are met.
over the 3 preceding years higher than or equal to 5% (new condition). The Board of Directors decided that the other elements related to the commitments made to Messrs. Henri de Castries and Denis Duverne remained unchanged.
Treasury shares held by Company subsidiaries (directly or indirectly) (d) 3,836,408 0.16% [0.23%] (c)
(c) These shares will be entitled to vote when they cease to be treasury shares (e.g. upon their sale or other transfer to an unaffi liated third party).
(hedging of the grant of free shares to employees of the Group)
Nature, purpose, terms and conditions: On February 17, 2010, the Supervisory Board acknowledged the effective renunciation by Mr. Denis Duverne of his employment contract as of the Shareholders’ Meeting of April 29, 2010 during which the former dual structure consisting of a Management
■ T he Supervisory Board authorized that Mr. Denis Duverne would be granted a contractual severance benefi t upon termination of his term of offi ce as executive offi cer. This severance benefi t, subject to performance conditions in conformity with the Afep-Medef recommendations , would be equivalent to that provided for in the collective agreement relative to director-level employees of insurance companies dated 1993 and which was previously applicable to Mr. Denis Duverne as employee. The initial amount of the severance benefi t would be equal to 12 months for Mr. Denis Duverne. One month will be added to the initial amount of the severance benefi t for each additional year of seniority acquired after April 30, 2010 up to a maximum cap of 24 months.
These commitments are in force upon the effective renunciation by Mr. Henri de Castries of his employment contract i.e. on April 30, 2010 and will continue so long as he remains an executive offi cer of AXA (including under renewed mandates).
“Commission”), jointly with Member States, has undertaken a fundamental review of the regulatory capital regime of the insurance industry (the “Solvency II” project). Due to come into effect on January 1st, 2016, Solvency II was designed to implement solvency requirements that would better refl ect the risks that insurance companies face and deliver a supervisory system that is consistent across all European member states.
In 2013, capital and credit markets generally became less volatile and performed well. Since 2008, however, these markets have experienced volatility and disruption which, during certain periods, has signifi cantly limited the availability of additional liquidity in the markets and credit capacity for most issuers including AXA.
(“HLA”) capacities to be requested from GSIIs in relation to their systemic activities, (2) greater regulatory oversight over holding companies, (3) various measures to promote the structural and fi nancial “self-suffi ciency” of g roup companies and reduce g roup interdependencies, and (4) in general, a greater level of regulatory scrutiny for G SIIs (including a requirement to establish a Systemic Risk Management Plan (“SRMP”) and a Recovery and Resolution Plan (“RRP”)) which may entail signifi cant new processes, reporting and compliance burdens (and costs)
such as the draft Common Framework for the Supervision of Internationally Active Insurance Groups, “IAIG”) will be implemented by legislation or regulation in each applicable jurisdiction is not yet clear, these measures, if implemented, could have far reaching regulatory and competitive implications for the AXA Group and adversely impact our capital requirements, profitability, the fungibility of our capital and ability to provide capital/financial support for Group companies, our ability to grow through future acquisitions, change the way we conduct business and our overall competitive position versus insurance groups that are not designated as G SIIs.
These competitive pressures could result in increased pricing pressures on a number of our products and services, particularly as competitors seek to win market share, and may harm our ability to maintain or increase our profi tability.
Interpretations Committee interpretations that were defi nitive and effective as of December 31, 2013 according to the adoption measures of the European Union (the “Standards”).
Downward parallel shift of 100bps in risk-free rates (3,736) (9%) 1,605 4% (2,132) (5%) (5,107) (14%) 1,544 4% (3,562) (10%)
represented an amount of €12,971 million (€16,312 million in 2012). Excluding assets backing Unit-Linked contracts, the corresponding exchange-rate risk was fully hedged through the use of derivatives.
both directly and indirectly through investment funds, with the aim of diversifying its investments and taking advantage of foreign markets’ performance. These investments were mainly denominated in US Dollars. Exchange-rate risk exposure is hedged using foreign exchange forwards for a notional amount of €3,992 million (notional amount of €3,837 million in 2012)
of total assets in 2012), of which €21,447 million were hedged
At December 31, 2013, the main hedging positions were as follows: Foreign currency hedging
No impairment charges were booked in respect of the Group exposure to sovereign debt securities issued by governments and related in Greece, Ireland, Italy, Portugal and Spain in 2013 and in 2012
These committees are responsible for, inter alia, defi ning the entity’s Strategic Asset Allocation, approving and monitoring investments, complying with local compliance obligations and participating to investment proposals syndicated by the Group.
Legal risk is addressed by defi ning a standardized master agreement. AXA business units may trade derivatives only if they are covered by legal documentation which complies with the requirements set out in the Group standard. Any change to certain mandatory provisions defi ned in the Group standard must be approved by Group Risk Management.
Assets held for sale including discontinued operations 164 181 360 12 Cash and cash equivalents 21,588 30,546 31,072
Other debts instruments issued, notes and bank overdrafts (d) 3,713 4,510 6,272
(b) As described in the Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19.
(d) Actuarial gains and losses accrued since the opening as of January 1, 2013.
Net cash provided by other assets and liabilities (h) 1,949 (135)
Union endorsed these fi ve standards but decided to postpone to 2014 the 2013 mandatory application date required by IASB, still with early application permitted. As a result, the Group has chosen January 1, 2014, as application date. Based on the analysis currently performed by the Group, the new and revised standards should lead to the change of the consolidation method of a limited number of entities, mainly some investment funds that are in the Group’s current scope of consolidation.
– Interests in Joint Ventures. IFRS 11 eliminates the option to apply the proportional consolidation method when accounting for jointly controlled entities and focuses on the rights and obligations of the arrangement, rather than the legal form. The application of the equity method instead of the proportional consolidation is not expected to have a material impact on the Group’s consolidated fi nancial statements.
Financial Statements for entities which meet the defi nition of an “investment entity”. Under the amendments, investment entities would measure their investment in subsidiaries at fair value through profi t or loss. However, at a higher level, the parent company of an investment entity shall consolidate all entities that it controls, including those controlled through an investment entity, unless the parent itself is an investment entity. For these reasons, the amendments, that are effective for annual periods beginning on or after January 1, 2014, with early application permitted, are not expected to have a material impact on the Group’s consolidated fi nancial statements.
If the transaction is denominated in a foreign currency, the exchange rate used is that in force on the date of the transaction or on the starting date of the transaction (if it occurs over a period).
An instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis between a willing seller and a willing buyer. For fi nancial instruments traded in active markets, quotes received from external pricing services represent consensus prices, i.e. using similar models and inputs resulting in a very limited dispersion.
This asset is tested for recoverability and any amount above future estimated gross profi ts is expensed. DAC are also tested through the liability adequacy test (see paragraph 1.14.2).
Group. This results in substantially all of the risks and rewards of the fi nancial assets remaining with the Group. As such, the
(b) UK Direct activities are held by AXA Insurance UK Plc.
AXA Insurance Public Company Limited (Thailand) Newly consolidated 99.31 99.31 - -
(c) Includes gains/losses from derivatives hedging variable annuities within Life & Savings and International Insurance segments.
Income arising from investments in associates – Equity method 71 46 - (1) - 3 - 119
(a) 2013 includes €41 million from the 10 years distribution agreement signed with HSBC in Mexico and €16 million from the acquisition of W.P. Stewart by AllianceBernstein.
Fair value mainly not based on an observable market data (level 3)
TOTAL FINANCIAL INVESTMENTS AND LOANS ACCOUNTED FOR AT FAIR VALUE 258,998 138,754 10,225 407,978 251,700 161,171 10,123 422,994
At December 31, 2013 the net transfers between level 1 and level 2 was €24,398 million. This amount was comprised of €26,504 million transferred investments from level 2 to level 1 and €2,106 million transferred from level 1 to level 2.
(€1,733 million as of December 31, 2012); ■ gross revenues: €1,468 million (€1,283 million as of
December 31, 2012 fi nal published data); ■ total liabilities (excluding shareholders’ equity): €10,670 million (€9,744 million as of December 31, 2012 fi nal published data); ■ gross revenues: €1,012 million (€872 million as of
PT AXA Mandiri Financial Services (c) 33 - 51 (4) (20) 60
AXA Investment Managers Asia Holdings Private Limited - - (3) - 4 1
Kyobo AXA Investment Managers Company Limited 27 - 2 2 (1) 29
This note excludes investment funds and real estate Companies accounted for using the equity method, which are presented as fi nancial investments (Note 9).
The table below reconciles assets and liabilities cash and cash equivalent balances with the statement of consolidated cash fl ows: (In Euro million) December 31, 2013 December 31, 2012
(b) The “Cash and cash equivalents” balances shown in the statement of consolidated cash fl ows do not include cash balances of consolidated investment funds from the Satellite Investment Portfolio (see Note 1.8.2). The “Cash and cash equivalents” item in the Statement of Consolidated Cash Flows excludes cash backing contracts where the fi nancial risk is borne by policyholders (Unit-Linked contracts).
Undated notes – (of which 500 MUS$ at 7.1%) in US$ 375 272 875 663
The following table shows the reconciliation between gross unrealized gains and losses on available for sale fi nancial assets and the corresponding reserve recognized in shareholders’ equity: (In Euro million)
The following table shows a breakdown by segment of liabilities arising from investment contracts including those where the fi nancial risk is borne by policyholders: (In Euro million)
Technical reserves as of December 31 (a) 414,226 70,874 485,100 416,480 70,664 487,145
Gross reserves for unpaid claims and claims expenses developed initially at the booking date (a) 27,825 29,128 31,168 41,301 44,020 44,046 44,470 46,367 45,946 46,440 47,095
Reserves adequacy ratios 3-Year survival ratio excluding commutations (a) 39 years 42 years 39 years 41 years
Non Life – locked-in discount rate (a) 4,177 3.82% 4,231 3.84%
Guaranteed annuity purchase rates provide contract-holders with a guarantee that at a future date the accumulated balance on their contract will be suffi cient to purchase a lifetime annuity at currently defi ned rates. The risk to AXA in these features is either that longevity will improve signifi cantly so that contractholders electing to exercise this benefi t will live longer than assumed in the guaranteed purchase rates, or that investment returns during the payout period will be lower than assumed in the guaranteed purchase rates. Reserves are established for these features on the basis of actuarial assumptions related to projected benefi ts and related contract charges. The determination of this estimated liability is based on models which involved numerous estimates and subjective judgments, including those regarding expected rates of return and volatility, policyholders’ behaviour assumptions, mortality, and benefi t election rates. There can be no assurance that ultimate experience will not differ from management’s estimates. In addition to providing for risk through establishing reserves, AXA
Impact of change in scope of consolidation and changes in accounting method 67 (19)
OTHER DEBT (OTHER THAN FINANCING DEBT) – OWED TO CREDIT INSTITUTIONS 1,526 1,681
As of December 31, 2013 and December 31, 2012, the Group did not hold any debt other than fi nancing debt designated as at fair value through profi t or loss.
Impact of differences in tax rate and impact of taxes not linked to pre-tax income (80) (148)
(b) The movements through shareholders’ equity mainly concern net investment hedge in the Company, revaluation of assets through shareholders’ equity and employee benefi ts actuarial gains and losses.
For further detail on Asset Liability Management governance, please refer to page 185 of Section 3.4 “Investment Community and Organization”.
The market turmoil that started in 2008 has increased the importance of risk management and led to additional hedging activity. While AXA’s liabilities remained almost stable, the notional amount of the derivatives used by AXA almost doubled over the 2006-2012 period. The rise in derivative activity was part of AXA’s risk management response to such a tumultuous environment.
(iv) hedge interest rate risk exposures arising in the context of its ordinary banking activities, mainly at AXA Bank
States Life & Savings (notional amount of €3.6 billion in 2013 compared with €1.8 billion in 2012), and in Japan
(a) Financing debt are disclosed in the balance sheet net of the impact of derivatives. As a result, the amount showing in the column “value including effect of derivatives” is their carrying value.
Equity instruments designated as at fair value through profi t or loss (d) 184 - 306 - 491
Other staff expenses and employees’ profi t sharing (b) 415 440
In the United Kingdom, the main defi ned benefi t plan was closed to new members on August 31, 2013 and members who were part of defi ned benefi t sections had the option to participate in the defi ned contributions sections.
The annual expense for employee pension and other benefi ts recorded in the income statement (included in Note 26.1), for the years ended December 31, 2013 and 2012 is presented below: (In Euro million)
Interest cost on the defi ned benefi t obligation 538 632 21 25 559 658
Statement of fi nancial position liability at the end of the year (7,261) (8,783) (542) (700) (7,802) (9,484)
(respectively decrease of 0.8%) in the defi ned benefi t obligation.
The fair value of AXA ADR stock options is calculated using the
At the end of the 5 years restricted period, the employees can, depending on their residence country, do any one of the following: (1) receive the cash value of their assets; (2)
(“AXA Miles”) to more than 120,000 employees worldwide, engaging all employees in the successful execution of the
The total cost of Performance Shares recognised is €27.7 million in 2013 (€22.0 million in 2012).
A number of lawsuits have been fi led against insurers and other fi nancial institutions in the United States and elsewhere involving insurers’ sales practices, alleged agent misconduct or misrepresentation, alleged failure to properly supervise agents, compensation of intermediaries, product features, fees or performance as well as numerous other matters. Some of these actions have resulted in the award of substantial judgments against insurers (including material amounts of punitive damages) or in substantial settlements. In certain jurisdictions, juries have broad discretion in awarding punitive damages. AXA’s United States subsidiaries are involved in these types of litigations as well as regulatory inquiries, investigations and/or actions with respect to these and a wide variety of other matters in connection with the ownership and/or management of real estate, asset or investment management activities, corporate transactions, employee benefi t disputes, alleged discrimination in employment practices, as well as other matters. For additional details on these matters, please see the
Philips resulted from adverse developments in the U.S. housing and mortgage market that precipitated the fi nancial crisis in 2008 and not from any negligence or failure on their part.
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free of material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
A Notice of Meeting must be published in the Bulletin des annonces légales obligatoires (“BALO”), at least 35 days before any Shareholders’ Meeting (or 15 days in certain specifi c cases)
A detailed description of AXA’s corporate governance structures including the composition and assignments of the Board of
To this end, GRM develops and deploys a number of risk measurements, monitoring instruments and methods, including a set of standardized stochastic modelling tools.
The PBRC Department is also responsible for controls relating to the preparation and processing of accounting and fi nancial information.
In order to assess the effectiveness of ICOFR, fi nancial reporting risks are initially identifi ed at an AXA Group level with a focus on identifying those risks that may result in a material misstatement of AXA’s consolidated fi nancial statements not being prevented or detected in a timely manner. This top-down risk-based approach starts with AXA’s consolidated fi nancial statement line items and is used to identify in-scope AXA
Because of its inherent limitations, internal control over fi nancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In 2012, allowances totaled €340 million, with €198 million arising from unrealized losses on derivatives; ■ release of provisions for contingent liabilities totaled €29 million, compared to €502 million in 2012, and primarily related to provisions for unrealized losses on derivatives recorded previously.
The application of regulation CRC 2008-15 dated December 4, 2008 relating to the accounting treatment of stock options
Stocks options, performance shares and performance units plans are described in Part 2 – Section 2.2 “Full disclosure on executive compensation and share ownership” of this Annual
The Company is the head of a French tax consolidation regime group. The tax consolidation regime provides that tax savings should be recognized directly in the Company’s fi nancial statements. However, a provision for the return of tax savings is recognized when there is a high probability that the benefi t will accrue to subsidiaries as a result of the prospect of future taxable income resulting from the Group’s strategic planning.
Miscellaneous receivables and currents accounts with subsidiaries 66 66 - 3. 5 Miscellaneous receivables and subsidiaries’ current accounts
(In Euro million) Value Less than 1 year 1 to 5 years
Subordinated convertible bond redemption premium (see § 2.9 of this note) 165 -
I Report of the Statutory Auditors on the C ompany’s fi nancial statements (For the year ended December 31, 2013)
AXA continued to recruit in 2013 and hired more than 16,500 employees, of which almost 4,800 were sales employees. Out of that total number of hires, nearly 400 persons were re-hires into the Company.
In total, AXA’s global gender balance was 52.5% women and 47.5% men.
Moreover, a corporate structure, AXA University, is entrusted with providing AXA’s leaders a place to focus on Group challenges and leadership practices. Training programs are structured around two broad themes: (1) professional “colleges”
■ Proportion of fi xed pay (related to wages) 47.0 % 48.2 %
Number of employees on site, Full-Time Equivalent (FTEs) FTE 104,082 103,554
(a) In 2013, environmental indicators were collected for sites representing 89,830 FTEs (unless otherwise indicated in these footnotes) and were then extrapolated, continent by continent, to cover all 103,554 salaried FTEs working at the AXA Group as of 31/12/2013. In 2012, this process took place on the basis of data collected from 94,889 FTEs, extrapolated to 104,082 FTEs.
(j) The Group had 102 millions customers in 2013 and in 2012.