no. 13. “AXA’s new Climate strategy”, including a strong commitment to align with the 1.5 degree trajectory of the Paris Accord, contributes to target 13.2 (incorporate climate change measures into national policies, strategies and planning). Through the partnerships developed with C40 and UN Habitat, AXA also contributes, via its insurance business, to: 1/strengthen, in all countries, resilience and adaptive capacities in the face of climate hazards and climate-related natural disasters
(SDG 13.1), and 2/improve education, awareness and individual and institutional capacities with regard to climate change adaptation, mitigation and early warning systems (SDG 13.3).
In 2019, AXA initiated the first actions as part of its new approach to better take biodiversity into account in these activities. The Ocean program developed by its subsidiary AXA XL contributes directly to targets 14.2 (manage and protect marine and coastal ecosystems on a sustainable basis) and 14.3 (minimize ocean acidification and combat its eff ects). By adhering to the UNPSI-Oceana global declaration, AXA also contributes to target 14.4 (eff ectively regulate fishing, put an end to overfishing and illegal fishing). The Biodiversity action plan will be further developed during 2020 to refine AXA’s contribution to this SDG.
(described in Section 7.3 “Climate change and biodiversity”) as well as the first actions developed within the framework of the WWF partnership initiate AXA’s contribution to “mobilize financial resources from all sources and significantly increase them to preserve biodiversity and ecosystems” (SGD 15.a). The Biodiversity action plan will be further developed during 2020 to refine AXA’s contribution to this SDG.
“Climate change and biodiversity” contributes directly to the 7.2 target, which consists in significantly increasing the share of renewable energy in the global energy mix by 2030.
AXA’s initiatives to exclude the cigarette industry (described in Section 7.3 “Climate change and biodiversity”) are in line with the objective of implementing the WHO
Framework Convention on Tobacco Control. In addition, AXA’s Health initiatives are strongly focused on the prevention of non-communicable diseases, with the
AXA has established a solid governance framework to develop and implement its Corporate Responsibility (CR) strategy. Each year, the Compensation and Governance Committee of the Board of Directors reviews the CR strategy, which is also submitted to the Group Executive Committee, at least once a year, for major decision-making. At the local entity level, a network of Corporate
AXA also relies on its Stakeholder Advisory Committee to better assess issues of future interest. In 2014, AXA created this committee to push forward the Group’s role in building a stronger, safer and more sustainable society. Twice a year, it brings together external and influential figures, who are collectively representative of civil society, as well as AXA’s
This group acts as an informal forum for in-depth discussions on the major trends that are shaping the world by addressing
“business” and “sustainable” issues. Topics discussed in 2019 included: social inequalities and inclusion, AXA’s contribution to the SDGs as well as Group’s responsible investment strategy,
It should also be noted that AXA’s responsible business strategy and initiatives are presented at least once a year to the Company’s social authorities (social partners). Dialogue with NGOs is also regular through meetings or responding to their requests (replies to questionnaires, for instance).
In order to incorporate external analysis, the most significant risks were also compared to the Dow Jones Sustainability Index’
Legal. In addition, following the acquisition of the XL Group in
This approach led to identify main non-financial risks and corresponding mitigation policies been implemented with key performance indicators.
Based on this methodology, and in application of article L.225105 -102-1 of the French Commercial Code related to extrafinancial reporting, the following main risks have been identified: ■ social risks: responsible employment practices, social dialogue and working conditions, employee development, talent attraction and retention. See Sections 7.2 “Social
Information” and 7.4 “Inclusive Insurance” for further information; ■ Human Rights risks-related: “inclusive” insurance solutions, customer protection, customer data protection, and preventing human rights violations within our supply chain.
AXA’s impact on climate change and the impact of climate change on AXA’s business) are developed in Section 7.3
“Climate change and biodiversity”; ■ societal risks issues: include partnerships and philanthropy and stakeholder engagement practices. See paragraph
“Inclusive Insurance” for more information; ■ risks related to fight against corruption and tax evasion: see Section 7.5 “Business conduct” and 7.6 “Vigilance Plan”.
AXA Tianping became a fully owned AXA company on December, 13, 2019. However, its commitment to Corporate Responsibility is already deeply rooted, through actions taken around poverty alleviation, health, and the environment. AXA Tianping is an active participant in Insurance Day, a Chinese government initiative to consolidate and amplify insurance company’s charitable actions at the national level. Each one of our 25 branches spread across the country participate in community led projects in the form of charitable giving for poverty alleviation (such as the donation of 100,000 RMB to finance a “foster home” for blind children awaiting care and adoption), community actions (including prevention through safe driving), and environmental actions
(such as the planting of 34,484 trees in central China, Shaanxi province, in 2019).
The Group’s environment, social and governance (ESG) performance is evaluated by specialized rating agencies. The Group generally ranks close to the top in its industry and is also included in main international sustainability indices. These ratings are described in further detail in Chapter 1 “The AXA Group” of this Annual Report.
An assessment of the social, environmental, societal, business behavior and Human Rights impacts of the Group’s activities has enabled the appropriate performance indicators to be defined in accordance with the requirements of the French
Commercial Code. Definition of key performance indicators are still in progress for issues related to: corruption, responsible procurement, Human rights and consumer protection.
The scope corresponds to legal entities (companies and/or organizations) which AXA owns, as of the end of year, directly or indirectly with at least 50% of the capital or voting rights. This scope is updated annually following potential acquisitions/
The environmental data provided in Section 7.3 “Climate change and biodiversity – Own operations” are collected from 98 entities, in accordance with the same rules used to define the scope of the social indicators (i.e. subsidiaries that are consolidated using the full consolidation method as at December 31, 2019). AXA sites with fewer than 50 FTEs are not included in the data collection, but are part of an extrapolation process. In 2019, environmental indicators were collected for 101,354 FTEs working on AXA
In particular, AXA Tianping has not been included in the environmental reporting process. This entity is nonetheless gradually being integrated into AXA’s policies and processes.
The data for any remaining months (maximum 6 months) is then estimated in accordance with Group’s defined methodology.
AXA sites with more than 50 FTEs as well as AXA-owned data centers. Environmental data contributors are required to gather all the relevant data into a dedicated reporting tool. For each site, contributors specify whether data has been measured or estimated based on the calculation rules defined in the
Insurance – Corporate philanthropy and engagement”. Notably, the number of unique volunteers is an estimate based on local entity knowledge of volunteering activities.
Reporting on certain indicators may have limitations due to: ■ the absence of nationally and/or internationally recognized definitions, concerning the diff erent categories of employment contracts; ■ the necessary estimates, the representativeness of the measurements made or the limited availability of external data required for calculations as the required annual update of emission factors; ■ the practical procedures for collecting and entering this information.
Over the year 2019, AXA has provided in-depth information related to policy and governance of the main risk linked to business behavior. Specific to these, AXA has developed robust internal processes and has implemented necessary policies as well as
UE Directive requirements relative to extra-financial reporting, the Group has been working towards the development of Key
Performance Indicators for these specific topics as part of its 2019 non-financial disclosure.
In order to develop its Corporate Responsibility strategy and report on its extra-financial performance, AXA voluntarily complies with certain international benchmarks, as described in this chapter. These include, for example, the United Nations
AXA is constantly working on being a responsible employer, placing employee engagement at the heart of its business strategy. Achieving this ambition has meant creating a workplace built on AXA’s values, which foster diversity and equal opportunities for all, promote employee participation, encourage professional development and support employee well-being. For additional and more comprehensive information, refer to “About
For further details on the sustainable risk assessment, please refer to Section 7.1.
AXA is committed to analyze those trends, to anticipate and adapt its employer proposition and practices. AXA is targeting the creation of a workplace reflecting the values of the Company, which: ■ fosters diversity as it breeds performance and innovation, promotes equal opportunities for all and creates the conditions for everybody to express his/her full potential at work; ■ encourages employees’ participation in the decision-making process and enable them to take risks; ■ provides best in class solutions and opportunities for continuous learning and professional development; ■ recognizes merit and people contribution to inspire others to follow the example; ■ promotes a culture where people are encouraged to share feedbacks to collectively improve the way of operating together; ■ promotes the balance between work and life and safeguards physical and mental health of people at work.
To confirm the relevance of the employer’s proposition and its adequate global execution, the Group has established a continuous dialogue with its people who have the responsibility to spot potential misalignments and suggest the management actions to repair. Regular employee engagement surveys are managed across the organization.
(iii) the decrease of AXA’s workforce split between the diff erent markets and transversal operations.
For further details on the above figures and a comparison between 2018 and 2019, please refer to the tables at the end of Section 7.2.
European Works Council (EWC), which extensive role goes beyond regulatory requirements.
AXA is committed to build an environment where the voices of employees are heard, and actions are taken to ensure they remain engaged. AXA uses the short and focused Pulse survey approach to measure its culture and quickly identify areas of improvement.
December 2019 which was surpassed by 7 points standing at an eNPS of 21.
AXA is committed to helping employees to live a better life, including well-being and work-life balance.
Offering an inspiring and inclusive work environment is a significant part in AXA’s overall employee value proposition.
expectations disrupt the market. Therefore, business and support functions need to constantly adapt to the environment, which opens plenty of opportunities for AXA people to enhance their skills-set. Learning is more than a key lever to enable employees to grow and develop the skills of the future. A lack of career, skills and talent management, in a highly-competitive environment, could impact AXA’s competitiveness.
AXA ambitions to act on key dimensions of the employee lifecycle: ■ Employer brand and value proposition, to continue attracting new critical talents with a strong capability to deliver to ensure AXA’s strategy success; AXA Group applies a “pay-forperformance ” approach. AXA’s policy is to target benefits coverage at a minimum level of the median of the relevant market. Benefits should include pension, healthcare and protection covers.
AXA’s learning and development function is dedicated to the progressive transformation of AXA into an adaptive and self-learning organization. The vision of the Group is to help people to continuously learn at any time of their workday, individually and collectively, and to foster new ways of learning: to learn continuously in order to thrive in a constantly changing environment. This ambition is supported by an easily accessible and dedicated digital ecosystem. Following the success of AXA’s partnership with Coursera since 2017, AXA is getting into a new partnership with LinkedIn Learning, which platform will allow more people to learn.
“AXA Learning Week”, was launched in 2019 to bring a common understanding of evolving customer needs and expectations.
In 2019, more than 362,000 days (compared to 327,000 days in 2018) have been delivered corresponding to 3.2 learning days on average by employee, compared to 2.7 days in 2018.
Executives with a clear focus on gender diversity. Diversity in teams is a shared goal for AXA’s 300 Top Senior Executives (the
(GEDP) program was a 2-year program built for executives, women and men, who have the potential to grow into key global leadership positions. 55% (40% of women) of GEDP
participants are now holding a GLN role; ■ strengthen gender balanced talent pipelines and succession plans: AXA entities have been requested to set up local targets of female representation at local Executive Committee level (some 300 people) and executive level (more than 3,000 people); ■ design the innovative AXELERATE learning solution to support 10,000 managers worldwide in the transformation journey, with the aim to equip them with key collaboration skills and modern networking leadership skills. The roll-out of this solution was finalized in 2019; ■ hire and promote talented women at leadership levels – AXA
applies gender equality in recruitment processes. For each opened Senior position, the shortlisted applicants are at least one man and one woman. Recruiter managers are key players in that domain.
At the end of 2019, the gender diversity within leadership teams was the following: HIGHLIGHT & KEY FIGURES: AXA’S LEADERSHIP TEAMS GENDER DIVERSITY
(Global Senior Executives). The network is made up of CEO and
Valuable 500, a global movement putting disability inclusion on the business leadership agenda.
Total headcount of salaried workforce (open-ended and fixed-term contract) 120,869 emp. -4.0% 125,934 emp. 116,514 emp.
Headcount of salaried sales force 16,187 emp. -4.4% 16,937 emp. 16,141 emp.
Headcount of salaried workforce with fixed-term contract 5,799 emp. 6,154 emp. 4,926 emp.
Average length of service of salaried workforce 10.3 yrs 10.4 yrs 10.8 yrs
Average FTE of salaried non-sales force 94,558.6 ft e 99,134.4 ft e 91,109.7 ft e
■ All Professionals 44,744.6 ft e 46,263.1 ft e 14,804.2 ft e
■ Associates 46,680.7 ft e 49,213.7 ft e 73,102.3 ft e
Average FTE of temporary non-salaried staff 10,634.8 ft e 8,586.9 ft e 8,399.9 ft e
■ Trainees/Apprentices 3,040.8 ft e 2,818.8 ft e 2,615.0 ft e
Net headcount evolution (entries versus departures) -6,891 emp. 234 emp. -1,729 emp.
■ Number of external recruitments (including re-hires) 11,603 emp. 13,218 emp. 11,467 emp.
■ Number of individual layoff s 1,735 emp. 2,028 emp. 1,847 emp.
■ Number of fixed-term contracts transformed into open-ended contracts 86 emp. 98 emp. 94 emp.
■ Number of individual layoff s 410 emp. 500 emp. 490 emp.
■ Number of external recruitments 926 emp. 585 emp. 335 emp.
(b) Salaried workforce who have left AXA because of an activity/job transfer to an external company or due to disposal of businesses, the employee is no longer under a contract with AXA.
Internal mobility rate of salaried workforce 8.2 % -0.7pt 8.9 % 10.5 %
Turnover rate of salaried workforce 15.0 % -0.6pt 15.6 % 15.4 %
Turnover rate of salaried non-sales force 13.3 % -1.1pt 14.4 % 14.3 %
Turnover rate of salaried sales force 24.9 % +2.1pts 22.8 % 22.3 %
■ Other reasons (pre/retirements and miscellaneous) 1.7 % 1.7 % 1.7 %
Average number of working hours per week 37.0 hrs +0.5% 36.8 hrs 36.9 hrs
■ Proportion of absences due to work related accidents 1.9 % 1.7 % 1.9 %
Absenteeism rate of salaried sales force 3.8 % 3.5 % 3.7 %
■ Proportion of absences due to sickness 73.9 % 69.4 % 72.5 %
■ Proportion of variable pay (related to wages) 18.8 % 22.8 % 23.8 %
■ Proportion of variable pay (related to wages) 15.3 % 16.9 % 16.9 %
■ Proportion of fixed pay (related to wages) 52.8 % 45.0 % 44.9 %
■ Proportion of variable pay (related to wages) 47.2 % 55.0 % 55.1 %
Number of training days of salaried workforce 362,448.3 days +10.8% 327,011.4 days 330,248.7 days
(1) AXA Tianping (2,988 salaried employees with open-ended contract), AXA Next (38 salaried employees with open-ended contract) and Kamet (352 salaried employees with open-ended contract) businesses did not report the training indicators.
Average number of training days per salaried workforce 3.2 days 2.7 days 3.1 days
As described above in Section 7.1, environmental protection, including the interconnected issues related to climate change and biodiversity loss, is a key concern for the AXA Group as an insurer, investor and a large multinational corporation. This section covers all three dimensions.
They have claims loss data, as well as models and tools to analyze and project this data. They have a duty to disseminate knowledge about new risks and create adequate insurance products and investments policies. Finally, through their significant investments, they are also well positioned to send the right signals to the investment community and to the specific companies they invest in. This requires both collective eff orts and more competitive initiatives: ■ investments: green “transition” investments, divestments, carbon neutrality in investment portfolios shareholder engagement, and climate risk analysis (TCFD (1)); ■ insurance: underwriting restrictions, “green/sustainable”
products; ■ operations: environmental footprint management; ■ thought leadership, NGO partnerships, academic research.
The process of ESG integration is coordinated centrally, with an active input from our asset managers that include ESG metrics in their investment analysis across asset classes and regions.
AXA’s Group-level Responsible Investment Committee (RIC) is chaired by the Group Chief Investment Officer, and includes representatives from AXA’s Asset Management entity, Corporate
about-us/responsible-investment) and currently include controversial weapons, coal, oil sands, tobacco, palm oil, and food commodity derivatives; ■ investing in green bonds, transition bonds and impact investment funds; ■ activating stewardship through voting and engagement on a range of ESG or sustainability issues.
Responsible Investment (UN PRI). AXA launched an online training course on responsible investment in collaboration with the AXA Group’s Responsible Investment Center of Expertise and AXA Investment Managers, which is mandatory for the
environment, social and political risks), and the criteria are adapted to the development levels of countries; ■ for real assets (direct property, commercial real estate loans and infrastructure debt): AXA’s analysis framework is based on proprietary questionnaires covering criteria such as energy eff iciency, environmental certificates, and accessibility.
Finally, “carbon footprinting”, which is applied to our equities, corporate Fixed Income and Sovereign Debt assets, complements the ESG metrics. See also further climate-related
As required by the TCFD guidelines and article 173, AXA strives to translate international climate objectives derived from the
■ Climate risk (the potential impacts of climate change on AXA’s investments): for equity and corporate bonds assets, AXA uses a framework developed by Carbon Delta (acquired by MSCI in 2019) which models transition risk based on “policy-related”
risks arising from regulatory eff orts to curb carbon emissions and comply with the 2015 Paris Agreement. This top down approach identifies emissions reductions targets by country, sector and company-level targets, applies corresponding carbon price constraints, compensated by future “green revenue” estimates. This approach enables to project companies’ potential costs or gains, which are translated into a forward-looking “cost of climate” indicator. For AXA’s sovereign portfolios, AXA uses another methodology (developed by
Beyond Ratings, acquired by the London Stock Exchange in 2019) to evaluate a comparable “transition risk” metric based on the allocation of carbon budget by countries supporting various warming scenarios, depending on macroeconomic variables such as GDP growth, population growth and energy eff iciency; ■ Climate impact (the potential impacts of AXA’s investments on the climate): in 2019, AXA has deepened its investigation of the concept of an “investment temperature”. This approach, labelled “warming potential” in Carbon Delta’s methodology, captures the climate-related aspects of a company’s activities, including its direct and indirect greenhouse gas emissions, technology developments, and “green revenue” opportunities.
“warming potential” indicator per company and sector, and ultimately for AXA’s investments.
In addition to the aforementioned “transition” risks, climate change, and in particular, extreme weather events, may impact
Group Risk Management teams collaborate to evaluate the financial impact of floods and windstorms on the buildings and infrastructure of these portfolios.
Moreover, for corporate bonds and equities, the costs of “physical risks” have been assessed by modeling the expected financial impacts of extreme weather events on companies’ facilities. The physical risk cost estimates factor in vulnerability to business interruption risk and asset damage, based on the exposure of facility locations to extreme weather events.
AXA has therefore decided to join and support the UN-led “Net
Certain activities and products are deemed to be inconsistent with our climate strategy and broader CR goals of protecting people over the long term. AXA has developed specific “sector guidelines” which apply both to investments and insurance (see following section). These currently include the following sectors: ■ coal and oil sands; ■ “controversial weapons” manufacturers that are banned by international conventions (antipersonnel landmines, cluster munitions/cluster bombs chemical, biological and depleted uranium weapons, nuclear weapons proliferation);
■ tobacco manufacturers, whose products conflict with our role as one of the world’s largest health insurers; ■ palm oil producers which do not adhere to this industry’s best sustainability practices (notably regarding deforestation, land and labor rights); ■ soft commodity derivatives which may be responsible for inflating the price of basic food commodities.
In total, AXA’s divestments (including new coal-related eff orts in 2019 – see below) represent approximately €7.5 billion (coal, tobacco, oil sands, controversial weapons and palm oil, in decreasing order of magnitude, and including XL Group assets).
“stranded”, which in turn may lead to reduced valuations. Current valuation models may not account for such risks adequately.
AXA acted early in May 2015 with a pioneering coal divestment, later strengthened in 2017 with underwriting restrictions, and extended these to our new entity AXA XL in 2018. In
November 2019, this approach have been strengthened and complemented with a long-term perspective. AXA now bans investments, for General Accounts and in Unit-Linked assets in fully controlled mandates, in the following companies: ■ power generation companies with coal share of power production (energy mix) over 30% and/or coal “expansion plans” producing more than 300 MW (previously: 3,000 MW)
Because oil sands are also a particularly carbon-intensive form of energy, AXA also divested from the main oil sands producers and from the main associated pipelines players.
Action Alliance (ORRAA), an alliance focused on developing risk management strategies using the experience and expertise of the insurance and broader finance community, to protect ocean biodiversity.
AXA significantly strengthened these restrictions by adding the following coal-related restrictions at client-level, mirroring divestment criteria: ■ any new and existing business, in any line of business is banned for power generation and mining clients developing new coal capacity (defined as developing more than 300 MW
In addition to reorienting its investment strategy, the Group seeks to minimize its “indirect” impact by off ering insurance solutions that promote environmentally-friendly behavior.
emission vehicles, home insurance policies encouraging energy eff iciency, renewable energy installations, and environmentally friendly claims strategies. AXA Climate offers parametric insurance products which, for example, help insured communities facing the consequences of climate-related disasters on agricultural crops (notably drought or flooding). See details page 424.
AXA Group leads the NZAOA’s “Methodology” working group; ■ TCFD: AXA co-presided the global industry-led Task Force on
Special Envoy for Climate Action). The TCFD provides guidance on how to disclose climate change risk and opportunities. In 2019, the FSB approved AXA’s renewed membership of the
Plastic Solutions Investor Alliance, an international coalition of 25 institutional investors that engage with consumer goods companies on the threat posed by plastic waste and associated pollution.
Planning and Implementing Technical Assistance at Scale, the result of our multi-year partnership with UN Habitat. This publication contributes to risk reduction and prevention measures by providing practical and accessible information on technical assistance to all stakeholders involved in housing reconstruction.
PRI, UN PSI (notably supporting its “Pilot project” to adapt the
The accuracy of the data and indicators presented is measured by following these steps: ■ review of the environmental protocol and reporting procedures at Group and entity level; ■ review of data and detailed tests on selected entities to verify the accuracy of the data, and consideration of comments; ■ consolidation of data covering all indicators, as well as consistency and control tests performed by the Group and our auditors; ■ verification of qualitative information (organization, policies and actions), as well as quantitative information (indicators, sampling techniques). The audit covers all of the entity’s data used to feed the environmental information published in this report. The report is included in this chapter.
AXA has a target to reduce its carbon emissions covering all greenhouse gas emissions “Scopes (1)”: ■ Scope 1: emissions from fuel consumed on AXA sites as well as by AXA-owned car fleet; ■ Scope 2: emissions from purchased energy (essentially electricity consumed by AXA buildings); ■ Scope 3: emissions from business travel and paper consumption. Note: investment-related “indirect” Scope 3 emissions are analyzed in Section 7.3 “Investments”.
AXA’s initial target for the 2012-2020 period is to reduce CO
The Group has also set two environmental targets that are unrelated to carbon emissions: ■ -15% water consumption; ■ 95% of paper must originate from recycled or sustainable sources.
“Sectoral Decarbonization Approach” to produce these targets, which have been submitted to SBT as follow: ■ 25% reduction in AXA’s CO
emissions reduction per FTE; ■ reduce waste by FTE by 15%; ■ reduce water consumption by FTE by 15%.
emissions per FTE related to paper, power, business travel and AXA vehicle fleet per person are stable between 2018 and 2019 and decreased by 38% between 37% of the Group’s CO
emissions are related to energy consumption, 46% from business travel (air and train), 14% from
emissions from business travel and paper consumption. In 2019, our Scope 3 CO
emissions for business travel airplane and train increased by 23% between 2018 and 2019. This increase is mostly due to the integration of the XL Group. For example, XL
Group number of kilometers traveled by plane contributed by 36% to AXA Group data.
per FTE). This increase in emissions is linked to an increase of participation rate from AXA employees (from 17% in 2018 to 22% in 2019) allowing more accurate data.
(13%), fuel/steam (10%) and chilled water (3%). AXA achieved a 6% decrease in total power consumption by square meters between 2018 and 2019, and a 45% decrease compared to 2012.
environmental certificate from building certification programs such as Building Research Establishment Environmental
Business travel per FTE increased by 20% between 2018 and 2019 and by 35% between 2012 and 2019. Business travel trends are closely correlated to our business dynamics, despite the implementation of online collaborative tools which help to reduce business travel, as well as the purchase of carbon credits by certain entities, in particular AXA XL, the largest contributor to this indicator.
AXA’s car fleet consists of sales vehicles and benefits-related vehicles. In 2019, the total distance travelled by the Group’s car fleet decreased by 2% compared to 2018. Further, in terms of per
/km. Employees are also incentivized to opt for hybrid or electric cars.
Many entities have implemented a printing policy which includes reducing the number of printers and installing an employee badging system to collect all printed documents. In 2019, AXA’s marketing and distribution paper consumption per customer decreased by 51% compared to 2018 and by 50% since 2012 (our global 2020 target has thus been achieved ahead of schedule).
Equitable Holdings, Inc. is no longer part of AXA Group and that in 2018 it contributed to 39% to total value reported on that indicator.
AXA’s water consumption per FTE decreased by 13% between 2018 and 2019, and by 30% between 2012 and 2019. This decrease in our water consumption is linked to better water management initiatives led by our local entities.
Group Operations, for which electronic waste is of particular relevance, is a key contributor to this effort, as it ensures compliance with the 2012/19/EU Directive relative to Waste
Number of employees on site, Full-Time Equivalent (FTEs) FTE 121,337 124,355 115,328
Business travel: airplane and train (c) Thousands of km 393,322 336,918 328,523
Business travel: AXA vehicle fleet Thousands of km 220,173 223,577 266,242
Home/workplace commute (round trip) (d) Thousands of km 976,840 920,155 932,534
(c) This data have been collected from entities representing 97,402 FTEs.
(g) Does not include company cars, to avoid double counting with the AXA vehicle fleet data.
Beyond investments where AXA has led the way with some pioneer positions in the past such as the divestment from tobacco, the Group is now moving forward on the insurance side as well, through fully fledged business opportunities such as: ■ the integration of ESG criteria in its product approval process; ■ its Emerging customers and initiatives to foster more resilience; ■ its AXA Climate parametric insurance off er; ■ its insurance products dedicated to Women; ■ its Health and disease prevention projects; ■ as well as new initiatives to contribute to a more inclusive economy & growth.
preventive services or financial education to minimize the risks our clients are facing for themselves, their goods and their savings), “Environment” (e.g. paperless contract, investment decisions based on environmental impact), and “Fairness” (e.g.
France built every new off er around these engagements and distributed in total 60 diff erent labelled products. Since 2015, 4.9 million labelled contracts have been sold.
In 2019, AXA’s Emerging Customers business covered almost 18 million customers and has continued to develop various partnerships (India, Indonesia, Thailand, Egypt, Malaysia,
Other examples to foster resilience through more accessible insurance include Mexico: in September 2017, two violent earthquakes hit Oaxaca, one of the poorest and most vulnerable
Regions of Mexico. In order to respond to this emergency and to increase the resilience of the population against future catastrophic events, AXA Mexico, in alliance with the public sector and civil society associations, implemented an integrated reconstruction project in the heavily damaged community of
(construction companies pay for it and use it to promote the quality of their work), with the objective to progressively develop an insurance culture, in a region where the insurance penetration is close to 0%. At the term of the 3 years, the extension of this
At end of December 2019, AXA Mexico covers 243 houses in
By drawing on the latest advances in technology and data science to protect vulnerable communities from the eff ects of climate change, AXA Climate provides parametric insurance solutions based on satellite and weather data that triggers quick and automatic payouts within a few days aft er a natural catastrophe or extreme weather event has struck. AXA Climate is also developing early warning systems using satellite and other weather data to anticipate and initiate contingency planning before a natural catastrophe occurs.
With more than 100 “B to B” clients worldwide, AXA Climate exceeded its 2019 business target. AXA Climate’s public clients include all major international sovereign risk pools which provide governments protection against natural disaster risks including tropical cyclone, earthquake, excess rainfall and drought. AXA
Climate also works with governments in the agriculture sector to protect farmers against yield losses due to multiple climate risks. AXA Climate supports the national agriculture insurance scheme in India which allows more than 55 million farmers to benefit from agriculture insurance.
Moreover, AXA Climate also works with the public sector on agriculture insurance projects at smaller scale in Senegal, Ivory
Women, particularly in emerging countries, are less well insured than men, despite being a powerful force in the economy. In 2014, AXA commissioned a special report, “SheForShield”, which looked at women’s attitudes towards insurance, as well as their needs and expectations. As a result, AXA developed the “Women in Insurance” initiative aimed at increasing women’s access to insurance products and services that respond to their needs and expectations, in line with our “Payer-to-Partner” vision.
The 3 main focus areas are: women as retail clients, as entrepreneurs and in the distribution force. AXA has developed a dual approach: in mature markets, AXA will empower women to be financially independent, and in emerging markets the objective is to empower women to “live better lives”. In 2019, 17 entities included “Women in Insurance” as a strategic priority and 26 products have been developed. This strategy is implemented through our “2020 Women Insurer of Choice” targets: ■ 45% of women retail clients; ■ 30% of SME clients are women (mirroring the global market opportunity); ■ 25% of women in distribution and sales management; ■ 40% of women amongst recruits and promotions.
Further, through AXA Research Fund, AXA dedicates €1 million to research to better understand and prevent health and entrepreneurial barriers for women.
Since 2018, AXA is a strategic partner of the Global Women’s
Forum. The objective is to bring AXA’s expertise and influence to collect insights and develop the best practices, solutions and projects to add value to the Forum’s on a yearly basis.
Through this organization, in 2019, AXA leads the publication of a white paper – Addressing health barriers through technology
– highlighting how women still face unequal access to adequate healthcare around the world.
to improving customers’ health, and aligned with the Group’s broader CR strategy to promote a stronger and safer society.
The first one, called “inclusive economy coalition” was launched back on December 18, 2018, when CEOs of major companies in France, including AXA’s, signed a commitment in favor of a more inclusive economy and committed to a list of initiatives to complement government measures in favor of purchasing power. This collective commitment is one of the private sector’s responses to the social vulnerabilities in France, as each of the signatories belong to sectors of the economy that directly address the concerns expressed by French people (e.g. energy, transports, financial services).
(+28% vs. 2017). With local associations, AXA also participated in events in various employment areas (Seine St-Denis, Bordeaux,
Lyon, Marseille, Rouen, Strasbourg). As a result of these actions, about a hundred candidates were recruited. Finally, to meet the collective objective of +5 million hours of training in 2019 and 2020, AXA provided more than 78,000 days of training to all AXA
The second working group worked on inclusive off ers proposed individually or in partnerships within the coalition members. With
The third working group wants to make the purchasing power of companies a lever for social inclusion and diversity, for the development of territories, VSE/SMEs and the social and solidarity economy.
Section 7.1 “General Information”), community involvement and corporate philanthropy have been identified as key enablers of
has developed and implemented various policies and initiatives, whose alignment with its responsible corporate citizenship strategy has been strengthened in 2019.
In 2019, almost 41% of the €45.3 million (€25.7 million in 2018)
■ C oncerning climate and environment, AXA has been supporting since 2011 the NGO Care, which acts to protect vulnerable populations in the face of climate change. In particular, AXA has supported the Where the Rain Falls program from the outset, which aims to better understand the impact of changes in rainfall (study phase in 8 countries between 2011 and 2013) and to help populations cope through an education and adaptation program (in India and Thailand between 2014 and 2019). As a result , beneficiaries have notably seen an improvement in their agricultural productivity (+60%)
and their ability to recover from extreme weather events such as drought and floods (+72%), compared to the situation they experienced before their participation.
■ I n 2019, the AXA Group has also entered into a new partnership with UNICEF under the “Health and prevention” pillar. In order to respond to the global epidemic of overweight and obesity, this 3-year program allows for action on the ground in the
Philippines and Brazil to prevent overweight and obesity from early childhood by promoting healthier eating habits.
■ N umerous actions are being carried out around the “Social
Louvre Museum (where the Mona Lisa by Léonard de Vinci is exhibited), and joined forces with the global solidarity that was demonstrated during the dramatic fire at Notre-Dame de Paris in April 2019 (€10 million mobilized for its reconstruction). AXA
Sud (France), Explainable Artificial Intelligence and Health with the University of Oxford (UK), Population-Stabilizing Portfolio
University of Cork (Ireland) and Communication Technologies and Molecular Information at Koç University (Turkey). The AXA
Research Fund also selected a total of 18 post-doctoral fellows on the key topics of Marine Biodiversity (8 projects), Mental Health
Entrepreneurship Chair at IEP Paris and was vocal in the field of women’s health. In particular, it confirmed its commitment to the research on the issue of equal access to healthcare and solutions to the gender health gap.
In September 2019, the AXA Fund and the Foresight Teams came together to integrate the scientific vision with that of future societal trends and to inform our role as responsible insurer more holistically.
employees, in which they carry out activities on themes that have been aligned in 2019 (when new guidelines were released) with the 3 pillars of AXA’s CR strategy. In 2019, nearly 39,000 employees
Through AXA Atout Cœur program, the Group seeks to promote all forms of employee engagement, particularly skills-based philanthropy. In 2019, AXA France continued to develop the “AXA
Atout Cœur program in 2019, as the entity has also long been developing volunteer work and skills sponsorship among its employees. XL Group employees contributed to 42,800 volunteer hours, or 15% of the total number of hours in 2019.
(CR Week) that helps to amplify employee mobilization and promote the AXA Atout Cœur program and the diversity of our commitments around the world. In 2019, the estimated number of volunteering acts (on or off the job) reached 33,000 for a total of 93,000 hours in 43 countries. XL Group made a major contribution to the success of this edition of CR Week thanks to its Global Day Of Giving volunteer day (23% of participants and 57% of time spent).
en/newsroom/publications/compliance-ethics-guide). In 2019, a new AXA Group Compliance & Ethics Code was launched. The
Code includes some subjects that have become increasingly important in recent years; these include Health & Safety at work,
To prevent this risk of bribery and corruption, AXA Group has introduced a Group ABC Policy that establishes minimum standards for ABC that must be implemented by AXA entities.
Group Anti-Bribery Off icer has been designated to design and reinforce the global ABC program at Group level and to guide its implementation across AXA. AXA entities have designated local Anti-Bribery Off icers to implement their ABC programs in accordance with AXA’s policy. Processes and procedures are in place to monitor compliance with AXA ABC standards across the
The Group’s insurance, banking and asset management operations are subject to an increasing number of legislative and regulatory initiatives designed to increase customer protection in the financial services sector. In the European Union, initiatives related to financial service include the Insurance Distribution
Union. Similar regulatory developments regarding business conduct are also taking place in many other parts of the world in which AXA operates and similar measures are in place to respond to those and to share experience between businesses facing similar challenges. Compliance risks, specifically business conduct risks, are assessed on an annual basis and the results and any necessary mitigation actions are developed and shared with senior management. Internal Control processes have been developed to ensure controls are eff ective and cover entities’
AXA has implemented a Group Data Privacy policy with the following objectives: ■ to ensure that AXA entities adequately protect the personal and sensitive data of customers and other persons obtained during their business activities; ■ to minimize the risk of AXA entities breaching applicable data privacy and protection laws (e.g. EU General Data Protection
■ AXA has implemented a Group level team dedicated to data protection, as well as a network of over 100 Data Privacy
In addition to our data privacy policies, AXA has developed cybersecurity capabilities. Indeed, security is a competitive advantage. A key success factor for AXA’s “Payer-to-Partner”
strategy is that customers trust AXA to keep them and their data safe and secure. While social unrest, terrorism, disruptive technologies, unpredictable natural disasters, cyber risk and misuse of information are a reality, it is critical for AXA to remain operational in case of crisis, to protect its customers’
data, employees, reputation, and assets. Security at AXA is managed by Group Security and based on three disciplines: Information Security, Operational Resilience and Physical
Security & Safety. Data hacking, identity theft , and trading of sensitive information are daily threats, in a context where cyber criminals are becoming more and more professional. AXA has developed and strengthened its capabilities to protect, detect and react to cyber threats, by investing in particular in innovative solutions, advanced technologies and solutions according to the security “by design” principle in order to remain among the best performing companies in terms of security. The deployment of its next-generation security operations center is an illustration of this. Moreover, AXA employees have a key role to play and are fully part of AXA security strategy. To make it an eff ective “first line of defense”, safety training and awareness campaigns are deployed throughout the Group and aimed at all employees.
AXA is one of the founding member of the French association
Responsible AI Committee in charge of contributing to answer to “the trustworthy AI assessment list” from the High-Level
Leveraging the initial “Give Data Back” platform that was, back in 2017, one of the first illustrations of how to share our P&C claims data for free in a prevention perspective, the concept has been replicated in Singapore to explore accident hotspots, as well as in
Translating AXA’s CR strategy and commitments into its management of vendors is a continuous activity for AXA. This alignment means AXA includes CR topics to select and monitor its providers. This approach is articulated around two axes: ■ responsible people & processes: all the AXA professionals working in a procurement department, in addition to the
Champions identified in our various entities; ■ responsible vendors: AXA requires from its vendors to be socially and environmentally responsible through the mandatory inclusion of a “Corporate Responsibility Clause”
in all our contracts. It includes in particular complying with the principles of the International Labour Organization
Both as a multinational company and as a provider of investments and savings products, the AXA Group follows a responsible and transparent approach on tax issues. For more information on AXA’s Tax policy, please refer to Section 6.3 “General Information”, paragraph
I Report by one of the Statutory Auditors, appointed as an independent third party, on the non-financial information statement included in the management report
English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
In our capacity as Statutory Auditor of AXA S.A, appointed as an independent third party and accredited by COFRAC under number 3-1060 rév.2 (whose scope is available at www.cofrac.fr), we hereby report to you on the non-financial information statement for the year ended...
The Statement has been prepared in accordance with the entity’s procedures (hereinaft er the “Guidelines”), the main elements of which are presented in the Statement of which are available on request from the Company’s head off ice.
(Code de déontologie) of our profession. In addition, we have implemented a system of quality control including documented policies and procedures regarding compliance with the ethical requirements, French professional guidance and applicable legal and regulatory requirements.
The work described below was performed in accordance with the provisions of articles A. 225-1 et seq. of the French Commercial Code determining the conditions in which the independent third party performs its engagement and with the professional guidance of the
Our procedures allowed us to assess the compliance of the Statement with regulatory provisions and the fairness of the Information: ■ we obtained an understanding of the entity’s activities, the description of the social and environmental risks associated with their activities and the impact of these activities on compliance with human rights and anti-corruption and tax evasion legislation, as well as the resulting policies and their outcomes; ■ we assessed the suitability of the Guidelines with respect to their relevance, completeness, reliability, objectivity and understandability, with due consideration of industry best practices, where appropriate; ■ we verified that the Statement includes each category of social and environmental information set out in article L.225-102-1 III, as well as information regarding compliance with human rights and anti-corruption and tax evasion legislation;
■ we verified that the Statement includes an explanation for the absence of the information required under article L.225-102-1 III, 2; ■ we verified that the Statement presents the business model and the principal risks associated with the entity’s activities, including where relevant and proportionate, the risks associated with their business relationships and products or services, as well as their policies, measures and the outcomes thereof, including key performance indicators; ■ we verified, where relevant with respect to the principal risks or the policies presented, that the Statement provides the information required under article R.225-105 II; ■ we assessed the process used to identify and confirm the principal risks; ■ we asked what internal control and risk management procedures the entity has put in place; ■ we assessed the consistency of the outcomes and the key performance indicators used with respect to the principal risks and the policies presented; ■ we verified that the Statement covers the scope of consolidation, i.e., all the companies included in the scope of consolidation in accordance with article L.233-16; ■ we assessed the data collection process implemented by the entity to ensure the completeness and fairness of the Information; ■ for the key performance indicators and other quantitative outcomes that we considered to be the most important, we implemented: • analytical procedures to verify the proper consolidation of the data collected and the consistency of any changes in those data,
• substantive tests, using sampling techniques, in order to verify the proper application of the definitions and procedures and reconcile the data with the supporting documents. This work was carried out on a selection of contributing entities which are AXA
Partners Columbia, AXA Colpatria Seguros, AXA Hong Kong, AXA General Insurance HK, AXA Partners Mexico, AXA Life Insurance
Japan, AXA Direct Japan, AXA General Insurance Japan, AXA Partners Malaysia, AXA Malaysia General Insurance, Bordeaux Pessac,
Catlin Services SE (UK), AXA UK Holding, AXA PPP Healthcare, AXA Polska SA, XL Global Services (US) and covers between 22% and 51% of the consolidated data relating to the key performance indicators and outcomes selected for these tests; ■ we referred to documentary sources and conducted interviews to corroborate the qualitative information (measures and outcomes)
that we considered to be the most important; ■ we assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.
We were assisted in our work by our specialists in sustainable development and corporate social responsibility. We conducted around fift een interviews with the people responsible for preparing the Statement, representing Group Public Aff airs and Corporate
Based on our work, nothing has come to our attention that causes us to believe that the non-financial information statement is not in accordance with the applicable regulatory provisions and that the Information, taken as a whole, is not presented fairly in accordance with the Guidelines.
QUANTITATIVE INFORMATION (AMONG WHICH KEY PERFORMANCE INDICATORS): ■ environment: energy consumption, distance covered by business travel and vehicle fleet, CO
emission by scope, water consumption, off ice and marketing paper consumption, waste production, “green” investments; ■ human resources: headcounts and distribution, number of external recruitments, number of resignations, number of dismissals, annual gross payroll (fixed and variable), number of training days, absenteeism rate; ■ human rights: number of emerging customers, number of entities which adhered to “Binding Corporate Rules”; ■ social: number of Stakeholder Advisory Panels, cash donations for community investment projects, number of employees who participated to volunteering acts, total hours contributed to volunteering acts; ■ corruption and tax evasion: tax expense of the consolidated financial statements.
The vigilance plan has reinforced an existing internal system that already included a number of tools and procedures implemented within the Group.
The vigilance plan encompasses the activities of AXA Group companies, including intra-group activities and operations, as well as those of contractors and suppliers with whom the AXA
I Identification and evaluation of risks to human rights and the environment
AXA Group’s activities and operations potentially impact the environment and human rights. According to AXA, the definition of human rights includes fundamental freedoms, health and personal safety.
The work carried out by AXA to establish its mapping of corporate responsibility risks as well as the main non-financial risks identified by the Group is presented in Section 7.1 “Introduction
In addition: ■ A s an investor, AXA has proactively implemented a Global
(CR) Risk assessment for its suppliers who were identified through an internal CR Risks Matrix. Suppliers are classified into Procurement risk categories and evaluated against five
CR criteria (environment; social; product & services enduse impact; suppliers’ supply chain; and business integrity).
AXA’s human rights policy (the “human rights policy”), available on the AXA Group’s website (www.axa.com/en/about-us/
our-commitment-to-human-rights), aims at preventing the violation of human rights and reflects AXA’s commitment to international general and sector-specific standards. The AXA
Universal Declaration of Human Rights, (ii) core standards of the International Labour Organization and (iii) Guiding
Compact (with principles 1 & 2 relating to human rights and principles 3 to 6 to labour standards) and encouraging the reporting of breaches to the compliance function; ■ setting ambitious Diversity and Inclusion (D&I) targets and initiatives. See further details on Diversity and Inclusion in
compliance-ethics-guide), pursuant to which employees must annually certify the compliance of their activity with the Code.
The AXA Group has implemented safety, health and security standards with which all Group entities must comply in order to protect employees against intentional, health or accident risks related to their business activity. These standards set out: ■ processes to identify risks, depending on the specific characteristics of the environment and the activity of each entity; ■ proactive and reactive measures to be implemented according to identified risks (information, training, protective measures, incident management procedures and crisis plans); ■ a performance measurement, quarterly reported to the AXA
Further, underwriting guidelines define prohibited business and integrate AXA’s policies (which can be directly or indirectly related to human rights) regulating insurance activities in sectors that represent increased risks.
The AXA Group’s Environmental Policy, available on the Group’s website (www.axa.com/en/about-us/environmental-policy), describes key actions aimed at reducing AXA’s direct and indirect environmental impacts.
Change and biodiversity – Investments” of this Annual Report for further details on our policies for the reduction of carbon emissions.
Finally, please refer to Section 7.3 “Climate Change and biodiversity” of this Annual Report for further details on AXA’s strategy, policy, targets and results with respect to environment protection.
In line with the Group’s Responsible Investment Policy, available on the AXA Group’s website (www.axa.com/en/about-us/
Moreover, AXA has decided to align its investments with the Paris
– Investments” of this Annual Report for detailed information about AXA’s responsible investment governance, policy, targets and results.
I Follow-up and report on the eff ective implementation of the vigilance plan
In 2019, the Group strengthened its eff orts to raise awareness on the vigilance plan amongst its entities. Awareness sessions were organized in order to remind entities of the duty of care regulation, as well as the penalties which could be incurred in the event of non-compliance with legal obligations. Correspondents of the Corporate Responsibility network attended these sessions in 2019 and sessions are also scheduled for 2020 within the
(e.g., earthquakes, floods, cyber-attacks) in crisis management guides of entities; and
■ designing a remediation plan on the accessibility/security of any entity’s premises following an audit by an external consultant.
(speak-up@AXA.com) allowing alerts from all geographical areas where the Group conducts business, without restrictions and irrespective of the stakeholders.
The AXA Group examines all alerts received with the objective of ensuring an adequate response (intervention by adequate actors, deployment of immediate corrective actions and/or precautionary measures, investigations etc.). Alerts are handled in accordance with a strict, independent process that includes key stakeholders in the vigilance plan where relevant. The identity of the author of such alert is treated in a confidential manner and cannot be disclosed without his/her consent (except to judicial authorities). AXA has expressly stated that there will be no act of retaliation against anyone who reports actual or suspected misconduct in good faith, or who participated in establishing the facts confirming a misconduct by providing evidence.
In 2018, AXA launched a dedicated Vendor Risk program to reinforce its operational control and Risk Management of third parties. Please refer to Section 4.7 “Operational Risk” of this
Most contracts entered into or renewed in 2019 included a Corporate Responsibility clause. At the end of 2019, AXA
In line with its strong culture of dialogue, AXA has regular discussions with its various stakeholders at different levels.
S takeholder dialogue” of this Annual Report for further details about the s takeholder dialogue initiated by AXA.
In order to maintain effective communication between employees and management as well as a constructive social dialogue, the vigilance plan was once again presented to employee representatives in 2019. Through discussions with the
Group’s French employee representatives and more particularly with the Social Committee of the French Group Works Council, certain provisions of the vigilance plan have been placed at the heart of the employer-employee dialogue.
APPENDIX IV GROUP EMBEDDED VALUE AND SOLVENCY II OWN FUNDS 470
is a process designed under the supervision of the Group Chief
Financial Off icer (CFO) and assessed under the supervision of the
March 2010 and its deregistration with the United States Securities and Exchange Commission (SEC) in June 2010, the Group has maintained an annual Internal Financial Control (IFC) program designed to evaluate the eff ectiveness of AXA Group’s ICOFR.
Management, including the Group Chief Executive Off icer (CEO), is responsible for establishing and maintaining adequate ICOFR.
In line with the COSO framework, AXA Group’s ICOFR is organized around the following key process categories: Entity-Level Controls
Company’s financial statements will not be prevented or detected on time.
This internal certification process across all in-scope entities is designed to assist AXA’s management in its evaluation of AXA
AXA Group’s ICOFR was eff ective as of December 31, 2019.
“Company”) internal control over financial reporting as of December 31, 2019, in order to be able to obtain reasonable assurance as to whether AXA’s management’s assertion that internal control over financial reporting is eff ective, as included in management’s annual evaluation of internal control over financial reporting, is fairly stated.
Report. Our responsibility is to express an opinion on the Company’s management’s assertion, based on our audit procedures.
Net income for the fiscal year ended December 31, 2019 resulted in a profit of €4,301 million compared to a profit of €307 million for the year ended December 31, 2018. This increase was mainly due to the rise in dividends received from subsidiaries and by the €3,180 million loss on Equitable Holdings, Inc. securities in 2018.
Dividends received from subsidiaries amounted to €5,865 million, versus €3,973 million in 2018, representing an increase of €1,892 million, mainly due to: ■ dividends from French entities of €1,661 million compared to €1,575 million in 2018; ■ dividends paid by the European entities of €2,974 million compared to €1,576 million in 2018, mainly due to the dividends paid by Switzerland, up €1,070 million, thanks to a capital surplus; ■ €268 million in dividends paid by the Asian entities compared to €179 million in 2018; ■ €962 million in dividends received from other Group entities compared to €643 million in 2018.
Capital operations resulted in a loss of €1,084 million in 2019, versus a loss of €3,048 million in 2018, broken down as follows: ■ €284 million provision for unrealized capital losses relating to hedging derivatives on equity markets; ■ €328 million for impairment following the agreement to sell
AXA Bank Belgium; ■ €201 million in foreign exchange losses, primarily on the US
dollar; ■ €395 million for payments and additional provisions for internal guarantee in the context of a business litigation.
The corporate income tax benefit amounted to €909 million compared to €762 million in 2018, and included €865 million of tax receivables from members of the tax consolidation group.
As of December 31, 2019, total assets amounted to €77,458 million, versus €79,033 million as of December 31, 2018.
Investments in subsidiaries, net of valuation allowances, totaled €67,663 million versus €71,317 million at year-end 2018, representing a decrease of €3,654 million, reflecting: ■ €5,081 million net book value of the 269 million shares in
Receivables from subsidiaries amounted to €1,144 million compared to €774 million at year-end 2018, i.e. an increase of €370 million, including a €492 million ($553 million) loan also related to the deleveraging plan of the XL Group.
Marketable securities of €726 million represented the repurchase of AXA shares to meet its obligations to deliver shares and to eliminate the dilutive eff ect of certain share-based compensation schemes.
Cash instruments amounted to €448 million and represented the option premiums paid within the context of the purchase of protection on equity markets.
Unrealized foreign exchange losses amounted to €3,419 million, including €3,058 million related to the deferred recognition of net foreign exchange losses in line with statutory hedge accounting principles, more than off set by unrealized gains on investments in subsidiaries. This item also reflects unrealized losses on assets and liabilities denominated in foreign currencies attributable to the eff ects of their revaluation at the closing exchange rate.
Shareholders’ equity, before net income for the period and aft er the payment of the dividends relating to the prior fiscal year, stood at €37,151 million, representing a decrease of €241 million, of which €375 million for the capital increase reserved for employees, and €67 million following the exercise of stock options, partly off set by €683 million related to the cancellation of shares bought back.
Other shareholders’ equity including the undated super subordinated debts, totaled €3,858 million compared to €4,032 million in 2018, due to a debt repayment of £219 million
Subordinated debt amounted to €13,028 million compared to €12,885 million in 2018, up €143 million, primarily due to an unfavorable foreign exchange rate impact.
Unrealized foreign exchange gains totaled €799 million compared to €1,099 million as of December 31, 2018. reflecting the revaluation of foreign currency denominated assets and liabilities at the closing exchange rates. It decreased mainly due to an unfavorable impact of the sterling pound and the US
Code (Code de commerce), disclosures related to the Company’s executive compensation appear in Part 3, Section 3.2. “Executive compensation and share ownership” of this Annual Report.
Total Amount VAT included of invoices concerned (in Euro) 112,759,797 82,002,097 46,811,183 5,840,507 317,701 134,971,488
Payment delay used for these calculations is French legal delay (30 days aft er the invoice issuing day).
In 2019, the Company did not acquire any significant equity interests within the meaning of Article L.233-6 of the French Commercial Code.
Net book value on the sale of fixed assets (9,259) (6,422)
III. NET INCOME FOR THE FINANCIAL YEAR VI + VII +VIII 4,301 307
a) Gross revenues before sales tax 2,709 3,608 5,287 4,161 6,011 b) Pre-tax income from continuing operations, before depreciation, amortization and releases 1,079 252 3,799 2,610 4,492 d) Net aft er-tax income aft er depreciation, amortization 3 – Per share data (in Euro)
5 Old Broad Street – EC2N 1AD – LONDON – United Kingdom - - -
General Guisan-str,40 – CH-8401 WINTERTHUR – Switzerland - - 313, Terrasses de l’Arche – 92727 Nanterre – France - - -
1) Subsidiaries not shown in section A - - a ) French subsidiaries (total) - - 138,956 b) Foreign subsidiaries (total) - - 95,348 2) Participating interests not shown in section A - - a ) in French companies (total) - - 8,025 b) in foreign companies (total) - - 120,068
The financial statements as at December 31, 2019 are prepared and presented in accordance with the provisions of the 2014
Since January 1, 2005, AXA has applied regulations CRC 2002-10 related to depreciation and amortization of assets (amended by regulations CRC 2003-07 and CRC 2005-09), and CRC 2004-06 related to the definition, recognition and measurement of assets, repealed and replaced by regulation ANC n°2014-03 chapter “titre
II, chapitre I Actifs non financiers”; application of these regulations has had no impact on the Company’s financial statements.
Articles 624-15 and 624-16) and chapters “titre IX, chapitre IV, section 5 Comptes financiers” (especially Article 945-50) treasury shares are recorded in “Marketable securities”. As of December 31, 2019, 31,102,295 shares were allocated to hedging purposes, representing €726 million.
Stocks options, performance shares and performance units plans are described in Part 3 – Section 3.2 “Executive compensation and share ownership” of this Universal Registration Document.
Financial assets consist in (i) investments in and receivables from subsidiaries and aff iliates, and (ii) other financial assets and loans.
The income statement distinguishes between ordinary operations and capital operations: ■ ordinary operations include dividends, revenues from other investments, financial expenses, operating expenses and income from transactions in marketable securities; ■ capital operations include gains or losses on the disposal of investments in subsidiaries and aff iliates and portfolio
FCP Mutual funds and to the average share price over the last month before the balance sheet date for the other securities.
Recommendation has been applied: past service costs are recognized in profit and loss over the vesting period and the expected return on asset is used in developing the net periodic pension cost. Pursuant to this review, the employee benefit liability recognized was nil as at December 31, 2019. Additional information on employees’ defined benefit obligations is provided in Note 26.2 of Consolidated Financial Statements.
Undated deeply subordinated notes are classified as “Other shareholders’ equity” when, like for ordinary shares, there is no contractual obligation to remit cash or any other financial assets.
Other shareholders’ equity included the undated deeply subordinated debts (TSS), amounting to €3,858 million compared to €4,032 million in 2018, due to a debt repayment of £219 million
This account included the AXA brand valued at €307 million and €21 million relating to the capitalization of soft ware expenses.
(b) I ncrease of €370 million, including a €492 million ($553 million) loan related to the deleveraging plan of the XL Group.
(a) Net impairments release of €2,076 million of which €1,377 million on Equitable Holdings,Inc. shares sold.
Miscellaneous receivables and currents accounts 3.5. Miscellaneous receivables and subsidiaries’ current accounts
Unrealized foreign exchange losses amounted to €3,419 million, including €3,058 million related to the deferred recognition of foreign exchange losses in line with statutory hedge accounting principles, more than off set by unrealized gains on investments in subsidiaries. This item also reflects unrealized losses on assets and liabilities denominated in foreign currencies attributable to the eff ects of their revaluation at the closing exchange rate.
Holdings, Inc. shares, and the hedge accounting on the Swiss franc.
The Company’s share capital is represented by 2,417,695,123 shares with a par value of €2.29, giving a total value of €5,536,521,832 as at December 31, 2019. These shares were all entirely subscribed and paid with rights from January 1, 2019.
(a) Proposed dividend at year-end 2019 is submitted to Shareholders’ Meeting of April 30, 2020.
Other shareholders’ equity includes the undated deeply subordinated debts (TSS), and amounted to €3,858 million compared to €4,032 million in 2018, due to a debt repayment of £219 million (or €245 million) and a foreign exchange impact of €75 million.
December 31, 2019 Less than one year 1 to 5 years More than 5 years
Company has the option of deferring payment of the coupons under certain conditions. Nonetheless, the coupons must be paid when these conditions cease to be met or on redemption of the instruments. When payment is deferred for an extended period, the coupons remain payable b y law. Similarly, in the absence of dividends being paid, unpaid coupons accumulated over the years will be recognized as payable upon liquidation, if any. These instruments are classified as debt on the basis of this contractual obligation to pay the coupons.
(a) Debt relating to non-current assets totaled €75 million and included shares issued by AXA Life Europe but not yet fully paid.
(a) Dividends received from investments in subsidiaries with more than 5% ownership for more than 2 years are tax-exempt, apart from a share of the costs and charges equal to 5% for non European entities or 1% for European entities.
(1) A 100 bps rise in interest rates leads to a 6.2% improvement in the fair value of debt, a -0.1% deterioration in the fair value of loans, and an improvement of 892% in the fair value of loans.
None of the transactions operated by related parties, that are still outstanding at year end or that occurred during the course of the year, account for the distinctive characteristics of transactions to be disclosed in accordance with the ANC regulations n° 2014-03
In compliance with the engagement entrusted to us by your Shareholders’ Meeting, we have audited the accompanying financial statements of AXA SA for the year ended December 31, 2019.
The audit opinion expressed above is consistent with our report to the Audit Committee.
We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2019 to the date of our report and specifically we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation
At December 31, 2019, investments in subsidiaries and aff iliates represented €67 663 million, a significant balance sheet item.
(in terms of whether or not they will be achieved) and in the judgment required to assess value in use, we deemed the correct measurement of investments in subsidiaries and aff iliates, particularly those based on forward-looking data, to be a key audit matter.
To assess the reasonableness of the estimated value in use of investments in subsidiaries and aff iliates, based on the information provided to us, our audit work consisted primarily of verifying that the estimated values determined by management were based on an appropriate measurement method and assumptions, depending on the investment concerned.
Forum when the values in use of life and non-life insurance companies are based on these frameworks; ■ For the other entities, obtain the projections for cash flow and operating cash flow for the businesses produced by their respective operational management teams, and: – Check the consistency of the historical data used with the audited financial statements; – Check that the assumptions made are consistent with the economic environment at the closing date and at the date the financial statements were prepared; – Compare projections made in previous periods with actual results in order to assess the reliability of the estimates; – Verify the accuracy of the value in use calculated; – Confirm that the value in use, which is based on projected cash flows, has been adjusted to account for debts; We also verified the recording of provisions for contingencies where the company is exposed to the losses of a subsidiary with negative equity.
INFORMATION GIVEN IN THE MANAGEMENT REPORT AND IN THE OTHER DOCUMENTS WITH RESPECT TO THE FINANCIAL
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents with respect to the financial position and the financial statements provided to the Shareholders.
We attest the fair presentation and the consistency with the financial statements of the information relating to the payment deadlines mentioned in Article D.441-4 of the French Commercial Code (code de commerce).
We attest that the Board of Directors’ report on corporate governance sets out the information required by Articles L.225-37-3 and
Concerning the information given in accordance with the requirements of Article L.225-37-3 of the French Commercial Code (code de commerce) relating to remunerations and benefits received by or allocated to the directors and any other commitments made in their favour, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from controlled companies which are included in the scope of consolidation. Based on these procedures, we attest the accuracy and fair presentation of this information.
With respect to the information relating to items that your company considered likely to have an impact in the event of a takeover bid or exchange off er, provided pursuant to Article L. 225-37-5 of the French Commercial Code (code de commerce), we have agreed this information to the source documents communicated to us. Based on these procedures, we have no observations to make on this information.
In accordance with French law, we have verified that the required information concerning the purchase of investments and the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.
We were appointed as statutory auditors of AXA SA by the Shareholders’ Meetings held on February 28, 1989 for PricewaterhouseCoopers
Responsibilities of Management and Those Charged with Governance for the Financial
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No 537/2014, confirming our independence within the meaning of the rules applicable in France such as they are set in particular by Articles L.822-10 to L.822-14 of the French Commercial Code (code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors.
Where appropriate, we discuss with the Audit Committee the risks that may reasonably be thought to bear on our independence, and the related safeguards.
This glossary includes definitions of non-GAAP financial measures, or alternative performance measures (“APMs”), indicated by an asterisk * , that Management believes are useful to understand the
Group’s business and analyze the Group’s performance. The scope of the following definitions of APMs remains unchanged compared to prior periods, except that the scope of certain definitions was updated to take into account (i) the deconsolidation of EQH, and
The split by geography is detailed below: ■ France (insurance and banking activities, and holdings); ■ Europe, consisting of: • Switzerland (insurance activities),
Adjusted Earnings represent the net income (Group share) as disclosed in the table set forth on pages 44 to 45 of this Annual
■ profit or loss on financial assets accounted for under fair value option (excluding assets backing liabilities for which the financial risk is borne by the policyholder), foreign exchange impacts on assets and liabilities, and derivatives related to invested assets and liabilities.
■ exclude derivatives involved in the economic hedging of realized gains and impairments of equity securities backing General
■ cost at inception, intrinsic value and pay-off of derivatives used for the economic hedging of realized gains and impairments of equity securities backing General Account and shareholders’
(net of financial charges related to undated subordinated debt recorded through shareholders’ equity, preferred shares and
Earnings (net of financial charges related to undated subordinated debt recorded through shareholders’ equity, preferred shares and
• average shareholders’ equity including undated subordinated debt (TSS/TSDI) and reserves relating to the change in the fair value through shareholders’ equity,
Free Cash Flows are defined as a measure of dividend capacity calculated as the sum of earnings and required capital change.
Capital Requirement, i.e. the denominator of the Solvency II ratio, is set at a level ensuring that insurers and reinsurers are able to meet their obligations towards policyholders and beneficiaries over the next 12 months, with a 99.5% probability. The Solvency
disclosures, please refer to AXA Group’s SFCR for the year ended
In compliance with the ACPR’s decision, from January 1, 2019, entities that were part of the XL Group (“XL entities”) have been fully consolidated for Solvency II purposes (as per the consolidationbased method set forth in the Solvency II Directive) and their contribution to the Group’s Solvency Capital Requirement has been calculated using the Solvency II standard formula. Subject to prior approval of the ACPR, the Group intends to extend its internal model to XL entities as soon as December 31, 2020.
Hybrid products: Savings products allowing clients to invest in both Unit-Linked and General Account funds.
Life & Savings Net Inflows are defined as the collected premiums
Underlying net technical margin includes the following components: ■ mortality and morbidity margin: the diff erence between income or earned premiums for assuming risk and the cost of benefits and claims charges directly linked to the claims experience or its anticipation (death or disability); ■ surrender margin: the diff erence between the benefit reserve and the surrender value paid to the policyholder in the event of early contract termination; ■ GMxB (Variable Annuity guarantees) active financial Risk
Management: the net result from GMxB lines corresponding to explicit charges related to these types of guarantees less cost of hedging. It also includes the unhedged business result; ■ policyholder bonuses if the policyholders participate in the risk margin; ■ ceded reinsurance results; ■ other changes in claims and insurance reserves: all the reserve strengthening or release coming from changes in valuation assumptions, claims experience, additional reserves for mortality risk and other technical impacts such as premium deficiencies net of derivatives if any; and
DPF, including the impact of interest capitalized; ■ administrative expenses; and
Discretionary Participation Features (DPF): • gross premiums (net of deposits), fees and other revenues are allocated in the Margin Analysis based on the nature of the revenue between “Fees & Revenues” and “Net Technical
• policyholders’ interest in participating contracts is reflected as a change in insurance benefits in the Statement of Income.
• change in UFR (Unearned Fee Reserve - capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues & fees” in the Underlying
Statement of Income, whereas it is located in the line “Fees
All accident year loss ratio net of reinsurance is the ratio of: ■ all accident years claims charge gross of reinsurance + claims handling costs + result of reinsurance ceded on all accident years, excluding the unwind of the discount rate used in calculating technical reserves; to
The Underlying Combined ratio* is the sum of the all accident year loss ratio and the underlying expense ratio.
Net inflows are used by the Management to measure the impact of sales eff orts, product attractiveness (mainly dependent on performance and innovation), and the general market trend in investment allocation.
Assets under management (AUM) are defined as the assets whose management has been delegated by their owner to an asset management company such as AXA Investment Managers.
AUM only include funds and mandates which generate fees and exclude double counting.
Articles L.225-100 et seq. of the French Commercial Code (Code de commerce).
Sections Pages 1. Trends/Earnings/Financial position and key performance indicators 14 to 18; 30 to 90 2. Use of financial instruments by the Company when relevant for assessing its assets and liabilities, financial position, and profits and losses 3. Description of major risk factors and uncertainties 158 to 175 and 190 à 208 4. Internal control and Risk Management procedures 176 to 208 5. Acquisition of significant equity interests in companies headquartered in France 446 6. Events subsequent to fiscal year end/Outlook 88 to 90 and 365 7. Dividend distributions over the last three years 16 8. Information on market and liquidity risks (interest rate, exchange rate and stock price fluctuation risk) 82 to 88 and 158 to 175 9. Purchase and sale of the Company’s own shares 376 10. Transactions involving Company stock completed by corporate off icers 144 13. Adjustment of the rights of holders of securities with a claim on the capital of the Company n/a 14. Extra-financial performance statement 394 to 432 15. Financial risks related to climate change 164 to 165 and 411 to 420 16. Research and development activities 425 17. Terms of payment 446 19. Corporate governance report 477
Articles L.225-37 et seq. of the French Commercial Code (Code de commerce).
A PPENDIX VIII COMMISSION DELEGATED REGULATION (EU) 2019/980 OF MARCH 14, 2019 – CROSS- REFERENCE TABLE
Universal Registration Document filed with the Autorité des marchés financiers (“AMF”) on March 19, 2020.
Arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer n/a 17. Related party transactions 153; 356 and 357 18. Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses 18.1 Historical financial information 14 to 16; 210 to 371; 444 to 469 18.2 Interim and other financial information n/a 18.3 Auditing of historical annual financial information 18.3.1 Audit report prepared in accordance with Directive 2014/56/EU and Regulation
Statement that (a) the universal Registration Document has been filed with the AMF
Document may be used for the purposes of an off er to the public of securities or admission of securities to trading on a regulated market if approved by the AMF together with any amendments, if applicable, and a securities note and summary approved in accordance with Regulation (EU) 2017/1129 1
Pursuant to Article 19 of Regulation (EU) 2017/1129, the following items are incorporated by reference into this Universal Registration
French version of which was filed with the AMF on March 19, 2018 under number D.18-0145 and is available on the AMF’s website within the BDIF
December 31, 2017 and the Statutory Auditors’ report thereon, respectively, on pages 187 to 333 and pages 334 to 339; ■ the Bylaws of AXA SA, as amended from time to time, are available on the website of the Company (
are either not relevant for investors or covered elsewhere in this
This Annual Report includes all the components of the Annual Financial Report (Rapport Financier Annuel) referred to in paragraph I of
Statement made by the person responsible for the Annual Financial Report 443
Report of the Statutory Auditors on the consolidated financial statements of the Group 366 to 371
Report of the Statutory Auditors on the corporate governance report 467