as well as in Article 222-3 of the AMF General Regulations (Règlement Général de l’AMF) (please refer to the table on page 520 of this Annual Report which indicates the relevant sections of this Registration Document corresponding to disclosures required under Article 222-3 of the AMF General Regulations), (ii) all disclosure matters required to be included in the Board of Directors’ Report to AXA’s Shareholders’ Meeting to be held on April 25, 2012, established pursuant to Articles L.225-100 and L.225-100-2 of the French Commercial Code (Code de commerce) (the relevant sections of this Registration Document corresponding to these required disclosures have been approved by AXA’s
Consequently, AXA’s Consolidated Financial Statements also comply with IFRS as issued by the International Accounting
(b) Individual shareholders who were residents of France for tax purposes were eligible for a tax relief of 40% on the dividend, i.e. €0.48 per share for fi scal year 2007.
South Korean Motor direct insurance market, (ii) established a joint-venture in the Ukrainian P&C insurance market with
as of December 31, 2011. For additional information, please see Note 2 “Scope of consolidation” included in
Total gross revenues (in E uro million) (a) 86,107 89,412 90,972
(b) Source: AXA, mainly based on national insurance association data for each specifi c country.
Life products include: ■ term assurance, which provides a death benefi t for a defi ned period of time; ■ whole life products, which provide a death benefi t over a person’s entire lifetime or up to a certain age, such as age 95 or 100, as long as the required premiums are paid; ■ universal life products, which are bundled products that include a signifi cant death benefi t component. Funds can be invested in unit-linked and/or general accounts; ■ endowment products, which pay a level death benefi t for a limited period of time or to age 65. An endowment benefi t is paid at the end of that period if the insured is still alive; ■ disability products, which pay a benefi t in case of disability.
Of which: (a) Mediterranean and Latin American Region includes Spain, Italy, Portugal, Greece, Morocco, Turkey, Mexico and Gulf Region.
operates at a global in Direct operations mainly in the United
The development of Asset m anagement activities is a key part of AXA’s fi nancial services strategy, which seeks to capitalize on existing strengths and expand its client base. This strategy is based on the belief that its asset management expertise will enable AXA to benefi t in the future from the expected growth in savings-related products in the markets where it operates.
related to a lasting strong demand from small and medium size enterprises for fully fi nanced solutions. In this context, AXA
(8) In line with “Verband der privaten Krankenversicherung e.V.” (association of private health insurers.)
(-39.8%) driven by the negative performance of capitalization products; ■ In Greece (4), the market remained affected by the economic crisis and experienced a decrease of -13.8% due to the drop in household revenues and the decrease of equity market; ■ In Turkey (5), market experienced a signifi cant growth of
(2) Source: Italian GAAP as of September 2011. Ranking as of December 2010, source: Associazione Nazionale Imprese Assicuratrici (ANIA).
On an average rate basis, the US Dollar lost 4% against the Euro
approval, court approvals and regulatory approvals in Australia and New Zealand as well as regulatory approvals in Asia,
This transaction generated a positive realized capital gain impact of €0.8 billion in net income and reduced debt gearing by 1 point in 2011.
(+20%); ■ partly offset by France (-1%) as price increases were offset by lower volumes.
(+5%) to €1,306 million. Excluding distribution fees (retroceded to distributors), net revenues increased by €54 million (+5%)
Net outfl ows of €-1 billion were mainly driven by outfl ows on
December 31, 2010 are presented in the table below: (in E uro million) Shareholders’
decreased by €91 million (-5%) mainly due to the non repeat of signifi cant sales of Variable Annuity products in 2010 driven by a change of inheritance tax law (€-59 million); ■ Health revenues (31% of gross revenues) decreased by €54 million (-3%) mainly resulting from Cancer product discontinuation in 2010 (€-39 million) and lower sales in
Medical products (€-19 million), partly offset by newly launched Cancer products (€+8 million).
Gross revenues increased by €122 million (+2%) to €7,001 million (1): ■ Life revenues (65% of gross revenues) slightly decreased by €17 million (-0%) to €4,582 million due to lower single premiums from unit-linked Savings as well as lower regular premiums from Protection partly compensated by higher single premiums from general account Savings and short term investment products; ■ Health revenues (35% of gross revenues) increased by €139 million (+6%) to 2,419 million mainly deriving from premium indexation and higher new business.
APE increased by €42 million (+9%) to €506 million: ■ Life increased by €8 million (+2%) mainly due to higher new business from general account Savings as well as Pure
On a constant exchange rate basis, expenses decreased by €14 million (-7%) driven by both lower acquisition expenses of €+9 million (-16%) and lower administrative expenses of€+5 million (-4%) refl ecting ongoing strict cost management.
to €1,563 million mainly driven by the strong decrease in both unit-linked and general account Savings products by €348 million (-21%), especially on Crest products, in a highly competitive environment; ■ Group Life revenues decreased by 2% (or €-10 million) to €579 million.
Net technical margin decreased by €32 million (-48%) to €34 million mainly due to the new recurring contribution to the policyholder protection fund (€-25 million) and a less favorable disability experience.
and lower general expenses (€+2 million) including €+8 million one-off benefi t.
Adjusted earnings decreased by €171 million to €68 million mainly due to realized capital losses on equities in 2011 compared to realized gains on equities in 2010 (€-142 million)
Net income decreased by €1 million to €6 million. On a constant exchange rate basis, net income decreased by €1 million driven by lower adjusted earnings.
(-32%) on a comparable basis to €73 million attributable to: ■ mature markets down €25 million (-33%) driven by lower
Income tax expenses decreased by €18 million (-24%) or €17 million (-24%) on a comparable basis to €-52 million mainly due to lower pre-tax underlying earnings as well as well as the introduction in 2010 of a new tax based on reserve in Italy.
Net realized capital gains or losses attributable to shareholders 2 (1) (4)
In addition, in order to improve visibility on Direct operations in
(a) Direct P&C operations are now reported as a separate business. Full year 2010 restated fi gures as reported were modifi ed accordingly. Restated means also the restatement following classifi cation of Canadian operation as discontinued business.
Net capital gains or losses attributable to shareholders net of income tax (49) 8
As a result, the combined ratio was up by 0.5 point to 97.6%.
Underlying earnings decreased by €45 million (-47%) to €50 million. On a constant exchange rate basis, underlying earnings decreased by €47 million (-50%) driven by higher losses on Life run-off portfolio and slightly lower results on
Net capital gains or losses attributable to shareholders net of income tax (2) (5)
Profi t or loss on fi nancial assets (under FV option) & derivatives (18) 20
(1) In banking segment, for net banking revenues, “on a comparable basis” means after intercompany eliminations.
Profi t or loss on fi nancial assets (under Fair Value option) & derivatives (17) (226)
Underlying earnings decreased by €8 million to €-561 million mainly due to: ■ an increase by €32 million in fi nancial charge as a result of lower fi nancial income on assets; ■ a €10 million operational loss related to Thailand fl oods (non consolidated entity); ■ partly offset by higher €+38 million result on hedging of earnings denominated in foreign currencies.
Underlying earnings decreased by €9 million to €-17 million mainly due to higher tax expenses (€8 million) resulting from higher inter-company dividends received.
Underlying earnings increased by €2 million to €-30 million mainly due to a decrease in general expenses.
(€+8 million). These improvements are partially offset by increased costs mainly relating to pensions (€3 million) and increases in tax one-off (€6 million).
Underlying Net Technical margin includes the following components: (i) mortality/morbidity margin: The amount charged to the policyholder in respect of mortality/morbidity for the related period less benefi ts and claims. It is equal to the difference between income for assuming risk and the actual cost of benefi ts. This margin does not include the claims handling costs and change in claims handling cost reserves; (ii) surrender margin: The difference between the benefi t reserve and the surrender value paid to the policyholder in the event of early contract termination; (iii) GMxB (Variable Annuity guarantees) active fi nancial risk management is the net result from GMxB lines corresponding to explicit charges related to these types of guarantees less cost of hedge. It also includes the unhedged business result; (iv) policyholder bonuses if the policyholder participates in the risk margin; (v) ceded reinsurance result; (vi) other changes in insurance reserves are all the reserves strengthening or release coming from changes in valuation assumptions, additional reserves for mortality risk and other technical impacts such as premium defi ciency net of derivative if any.
Costs (DAC) and net rights to future management fees only for investment contracts without DPF; (iv) administrative expenses; (v) claims handling costs; (vi) policy holder bonuses if the policyholder participates in the expenses of the Company.
+ claims-handling costs + result of reinsurance ceded on all accident years excluding the recurring interests credited to the insurance annuity reserves, to
and less the net consolidated book value of its equity interests in credit institutions, investment companies and other fi nancial institutions: €3.9 billion (€4.3 billion at
or collateral calls, causing us to liquidate assets at unattractive prices or to borrow at unattractive rates to raise necessary cash, and/or negatively impacting our ability to sell new insurance policies or other products due to negative publicity associated with a downgrade and the associated impact on public confi dence in us.
Transactions involving Company securities completed in 2011 by the members of the Board of Directors 154
Shareholders’ Meeting for four years. However, following the change in the Company’s governance structure on
Deputy Chief Executive Offi cer of AXA in charge of Finance, Strategy and Operations
Supérieure (ENS-Ulm), is engineer of the Corps des Mines and earned a DEA (postgraduate degree) in quantum optics and an aggregation in Physics. From 1997 to 1999, she was in charge of budget of Telecommunication and Defense at the French Ministry of Economy. From 1999 to 2002, she was Advisor on Industrial Affairs of the French Prime Minister
July 2001, he was appointed Chairman of the Monte dei Paschi di Siena Foundation. Since April 2006, Mr. Giuseppe Mussari has been Chairman of Banca Monte dei Paschi di Siena
To the best knowledge of the Company, there are no family relationships among the members of the Board of Directors or with members of the Executive M anagement.
Directors has ensured that independent directors have a major role on all Board Committees. In this context: ■ each of the four Committees is chaired by an independent director; ■ all members of the Audit Committee and the Compensation
The Audit Committee met seven times in 2011. The average attendance rate was 96.43%. Within the framework of its principal assignments such as described above, the Committee focused, in particular, on the following issues: ■ full year fi nancial statements for 2010; ■ 2010 Annual Report (Document de Référence); ■ half- year fi nancial statements for 2011; ■ results of the Group’s Internal Financial Control (IFC) program; ■ risk management framework, appetite and reporting; ■ results of internal and external audit work; ■ reporting of litigation and regulatory matters; ■ reporting of whistle-blowing and employee complaints; ■ reporting of internal and external fraud events; ■ internal audit resources and planning; ■ Statutory Auditors’ independence, remuneration and planning.
Executive Offi cer. The Committee is also informed of the appointments of the main executives of the Group, and in particular of the members of the Management Committee and the Executive Committee. The Committee examines the provisions considered by the Chief Executive Offi cer in order to prepare the renewal of the members of the Executive
Executive Offi cer, the Deputy Chief Executive Offi cer and to the members of the Management Committee and the
Management Committee and an Executive Committee also support the operational management of the Group.
Frank Keuper (a) Chief Executive Offi cer of AXA Konzern AG (Germany)
Over the past years, AXA initiated a process designed to harmonize corporate governance standards throughout the Group. This effort is focused, among other matters, on standardizing, to the extent practicable, principles relating to a number of corporate governance matters including board composition and size, directors’ independence criteria, b oard c ommittees’ and their roles, and directors’ fees.
Chairman & Chief Executive Offi cer France 2,700,000 2,599,327 96% 2,466,667 2,061,087 84% 2,350,000 2,034,171 87%
Chairman & Chief Executive Offi cer France 2,980,624 554,400 1,137,240 - 4,672,264
Chief Executive Offi cer of AXA France France 600,000 918,000 - - 3,331 1,521,331
September 30, 2010 and Mr. François Pierson benefi ts from airplane tickets between Paris and his domicile in Marseille.
No directors’ fee is paid by the Company to directors exercising executive functions (i.e. Chief Executive Offi cer and Deputy
Ms. Wendy Cooper, member of the Board of Directors representing the employee shareholders of the AXA Group, received in 2011 an annual gross compensation of USD 514,315 paid by AXA Equitable in the US in connection with her position there as Senior Vice-President and Associate General
On the basis of the AXA share price on December 30, 2011, i.e. €10.045, only 4,697,378 subscription or purchase options are in the money, i.e. 5.94% of the outstanding stock options,
The fi rst 10 employees benefi ciaries (c) 782,276 - 844,314 762,301
Representative of employee shareholders to the Board of Directors 18/03/2011 subscription or purchase 18/03/2021
François Pierson (a) Global Head of Property & Casualty 2,522,644 -
Savings; ■ for the Performance Units and Performance Shares granted in 2010 and 2011, the cumulated performance in 2010-2011, and 2011-2012, will be measured over a two year period, based on the following performance indicators: • for the operational business units performance/regions: underlying earnings and net income,
(f) The 304,926 units acquired by 8 benefi ciaries of the June 10, 2009 plan have been settled as €4 million and 23,933 shares restricted until June 10, 2013.
(b) Restricted Shares granted as replacement for 143,630 Performance Units 2004 cancelled.
(d) 975 shares of the March 19, 2010 acquired by anticipation related to deceased benefi ciaries.
Wendy Cooper Representative of employee shareholders to the Board of Directors
of the French Labor Code, or (iii) granting free shares to eligible employees or executive offi cers of the Company in accordance with the provisions of Article L.225-1971 of the French Commercial Code and/or its affi liated entities or economic interest groups in accordance with the provisions of Article L.225-197-2 of the French
In connection with its share repurchase program, which was approved by AXA’s shareholders at their General Meeting held on April 29, 2010 (11th resolution), AXA, in accordance with the provisions of Article L.225-209 of the French Commercial
As a result, on December 31, 2011 the total number of treasury shares, all allocated for hedging purposes, was 979,168, corresponding to 0.04% of AXA’s share capital at the yearend closing date, acquired for an aggregate purchase price of €17,405,939.33 (with a par value of €2.29 per share).
With AXA ASIA – Directors concerned: Messrs. Henri de Castries and Denis Duverne Nature, purpose, terms and conditions: On October 12, 2011, the AXA Board of Directors authorized the signing of a contribution in kind agreement (hereinafter the
With the Schneider Electric Group On May 15, 2006, and after authorization by the AXA Supervisory Board on December 21, 2005, the AXA Group (the Mutuelles AXA,
With Mr. Henri de Castries Nature, purpose, terms and conditions: On February 17, 2010, the Supervisory Board acknowledged the effective renunciation by Mr. Henri de Castries to his employment contract as of the Shareholders’ Meeting of April 29, 2010 during which the former dual structure consisting of a Management Board and a Supervisory Board was replaced by a unitary Board of Directors structure in which Mr. Henri de Castries holds the position of
AXA Group in BNP Paribas; ■ in force for a period of three years as from August 5, 2010, this agreement is renewable automatically for successive periods of one year, unless one of the two parties decides to terminate it beforehand, in which case it is required to give a three month notice prior to the next renewal date; ■ the agreement was made public by the AMF (Autorité des marchés financiers) on August 9, 2010.
Paris, France, this supervision is based to a signifi cant extent on European Union directives, discussed more fully below, and on the French regulatory system. The AXA Group’s principal regulators in France are the Autorité des marchés financiers
European Commission proposed the revision of MiFID in 2011; ■ over the past several years a number of European jurisdictions, including France, Belgium, Spain and other jurisdictions have enacted legislation that permits corporate entities to be charged with criminal offenses. The standard for attributing criminal conduct by corporate offi cers and employees to corporate entities is not clearly defi ned in many of these jurisdictions and government prosecutors and judges have broad discretion in this area. In recent years, indictments of corporate entities for alleged criminal offenses have become increasingly common. While a criminal indictment of a corporate entity may not pose material fi nancial risk, it could have broad potential implications for a regulated fi nancial institution like AXA both from a reputation point of view and from a regulatory perspective because a criminal conviction can have potentially far-reaching negative implications for other Group companies engaged in regulated businesses around the world including for their ability to obtain and/or maintain licenses to engage in certain types of regulated business activities; ■ a number of countries in Europe are currently considering legislation that would authorize class action litigation and/or other forms of redress for consumers; ■ on September 28, 2011, the Commission published a proposal for a fi nancial transaction tax that would be levied on transactions in fi nancial instruments by fi nancial institutions if at least one of the parties to the transaction is located in the European Union. If not adopted by the European Union as a whole, such a tax might nonetheless be adopted by one or more European Union member states (as has been recently proposed in France) on certain fi nancial instruments.
within the US Treasury Department. The FIO has authority that extends to all lines of insurance except health insurance, crop insurance and (unless included with life or annuity components)
After having completed its archival researches and audit processes as well as the payment of all valid claims submitted by Holocaust victims and their heirs, the ICHEIC concluded its work in March 2007. As a result of its participation in the
Company does not use the “carve out” option to avoid applying all the hedge accounting principles required by International
(taking into account the proposed 2011 dividend payment of €0.69 per share) which represented a €20.7 billion capital surplus at that date: (i) €23.6 billion of required capital (1), versus (ii) €44.3 billion of available capital (2). The Company’s year-end 2011 solvency margin is higher than its consolidated solvency margin at December 31, 2010 (182%) and at
Rating agencies also take into account the Company’s consolidated solvency margin and the regulatory capital position of its insurance subsidiaries in assessing AXA’s fi nancial strength and credit ratings. Rating agencies may make changes to their internal models from time to time that may increase or decrease the amount of capital we must hold in order to maintain our current ratings. For example, certain rating agencies are currently considering adjusting their criteria for recognizing certain subordinated debt as eligible capital which may negatively impact their opinion on the Company’s capital position and consolidated solvency margin. To the extent our regulatory capital levels are deemed insuffi cient to meet rating agency criteria, our fi nancial strength and credit ratings may be downgraded.
The determination of the amount of allowances and impairments taken on our investments requires use of signifi cant management judgment in certain cases, particularly for debt instruments, and could materially impact our results of operations or fi nancial position
Ongoing volatility in interest rates and credit spreads, individually or in tandem with other factors such as lack of pricing transparency, market illiquidity, declines in equity prices and the strengthening or weakening of foreign currencies against the Euro (and/or structural reforms or other changes made to the Euro, the Eurozone or the European Union), could have a material adverse effect on our consolidated results of
operations, fi nancial position or cash fl ows through realized losses, impairments, and changes in unrealized gains and loss positions.
sustained increase in the infl ation rate in our principal markets would have multiple impacts on AXA and may negatively affect our business, solvency position and results of operations. For example, a sustained increase in the infl ation rate may result in an increase in market interest rates which may (i) decrease the estimated fair value of certain fi xed income securities we hold in our investment portfolios resulting in reduced levels of unrealized capital gains available to us which could negatively impact our solvency margin position and net income, (ii) result in increased surrenders of certain Life & Savings products, particularly, those with fi xed rates below market rates, and
The terrorist attacks and responsive actions in recent years have signifi cantly adversely affected general economic, fi nancial and political conditions, increasing many of the risks in our businesses. Such attacks as well as civil unrest, wars and other similar geopolitical events may have a continuing negative effect on our businesses and results of operations over time.
We may, in the future, offer rights, warrants or similar securities at prices below the then-current market price which may adversely affect the market price of our ordinary shares, and our ADS , and dilute the positions of existing shareholders.
C harter (S tatuts), see Section “Voting rights” included in Part 5 of this Annual Report. The Mutuelles AXA have stated their intention to collectively vote their shares in AXA. We cannot assure you that the interests of the Mutuelles AXA will not, from time to time, confl ict with your interests as a shareholder. For example, even though the Mutuelles AXA do not hold a majority of the total voting power in AXA, efforts by the Mutuelles AXA to decline or deter a future offer to acquire control of AXA, which other shareholders may fi nd attractive, may prevent other shareholders from realizing a premium for their AXA ordinary shares or ADS . The Mutuelles AXA may decide to increase their interest in AXA or to sell all or a portion of the ordinary shares they own in the future .
ordinary shares on Euronext Paris which may consequently cause the trading price of AXA ADS on the over-the-counter markets in the United States to also decline; ■ the US dollar equivalent of the proceeds that a holder of
■ the US dollar equivalent of cash dividends paid in Euro on the AXA ordinary shares represented by the AXA ADS .
holders including disposing of such rights or other securities and distributing the net proceeds in US dollars to ADS holders.
Managementis responsible for: ■ ensuring that the “second line of defense” is effective on all signifi cant risks; ■ identifying, measuring and managing fi nancial, insurance and operational risks; ■ defi ning and monitoring risk appetite on these risks – the risk appetite defi nes management’s tolerance of a negative variance in earnings value, capital and liquidity prompted by 1 in 20 year event and 1 in 200 year event ; ■ implementing an internal capital model and leading the approval process with supervisors for future Solvency II; ■ building a favourable environment – in terms of models/
Savings business of 4% to upward 100 bps and -11% to downward 100 bps (2010: 2% and -7%) show an asymmetry predominantly driven by guaranteed interest rates having higher value when interest rates decrease, while higher reinvestment rates would need to be shared with policyholders limiting shareholders’ gains in a higher rate environment. However this classical pattern is not followed everywhere, as for certain type of business with signifi cantly low interest rate guarantees, the
2011 equity market sensitivities (% of Group EV) for otherthan -life businesses of 1% to upward 10% or -1% to downward 10% (2010: 2% and -2%) refl ect the impacts on equities including derivatives on equities.
In addition debt securities and related issued by government and related in Greece, Ireland, Italy, Portugal and Spain classifi ed under Fair value option amounted to €737 million as of December 31, 2011.
Return on Capital (RAROC) approach; ■ quality sovereign, international institutions and bank counterparties portfolio closely monitored; ■ adequacy to Group operational risk standards; ■ tightly managed market, asset & liability, foreign exchange and interest rate risks including a strict collateral policy.
regularly monitors its exposure to its main reinsurers, to ensure that consolidated limits remain within Group risk tolerance
Other debts instruments issued, notes and bank overdrafts (e) 6,272 6,504
Collateral debts relating to investments under a lending agreement or equivalent 27,509 23,399
CONSOLIDATED FINANCIAL STATEMENTS/FULL YEAR 2011 4 4.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Instruments, published on November 26, 2009, clarifi es the requirements when an entity renegotiates the terms of a fi nancial liability with its creditors and the creditors agree to accept the entity’s shares or other equity instruments to settle the fi nancial liability fully or partially; ■ The Improvements to IFRSs, published on May 6, 2010, include amendments that are not part of a major project.
January 1, 2012 for companies applying US GAAP indicate that accounting standards are moving to lower capitalization and therefore deferral of acquisition expenses. This change in accounting policy expected to be applied retrospectively by the Group in 2012 is in line with the updated draft wording provided at the Insurance Working Group on October 24, 2011 around direct costs of acquiring a portfolio of insurance contracts which so far differs from ASU-2010-26 by not limiting the deferral to expenses from successful efforts only and in the detail of how that principle is applied (incremental direct cost of acquisition and specifying some other costs). The Group was seeking for better alignment with US GAAP applicants starting when the ASU-2010-26 change was applicable for such companies while conscious that the Group would be submitted to IFRS 4 Phase II whenever applicable. The estimated impact of this change would lead to a reduction of net DAC balance of approximately €2 billion Group share net of tax, policyholder participation and URR where applicable, as well as to approximately €-0.1 billion impact on earnings.
Companies in which AXA exercises signifi cant infl uence are accounted for under the equity method. Signifi cant infl uence is presumed when AXA directly or indirectly holds 20% or more of the voting rights or, for example, when signifi cant infl uence is exercised through an agreement with other shareholders.
The Group is also party to reverse repurchase agreements under which fi nancial assets are purchased from a counterparty, subject to a simultaneous agreement to return these fi nancial assets at a certain later date, at an agreed price. If substantially all of the risks and rewards of the securities remains with the counterparty over the entire lifetime of the agreement of the transaction, the securities concerned are not recognized as fi nancial assets of the Group. The amounts of cash disbursed are recorded under fi nancial investments, except for transactions arising from banking activities, which are recorded as separate assets. Interest income on reverse repurchase agreements is accrued over the duration of the agreements.
1.8. ASSETS BACKING LIABILITIES ARISING FROM CONTRACTS WHERE THE FINANCIAL RISK IS BORNE BY POLICYHOLDERS
In some insurance or investment contracts, the fi nancial risk is borne by policyholders. Such contracts are usually unit-linked contracts.
Deputy Chief Executive Offi cer are both members of the Board of Directors. They are assisted by a Management Committee in the day-to-day operational management of the Group and by an Executive Committee to consider Group strategy.
Net result from outward reinsurance 185 (839) (282) - - - 149 (787)
Rosenberg and other AXA IM transactions 1999 & 2005 183 - 183 178 - 178
As announced on November 15, 2011, AXA Bank Europe decided to close its Swiss operations as part of a cooperation agreement with bank zweiplus. AXA Bank Switzerland has transferred its customer portfolio to bank zweiplus. The one-off costs associated with this operation amounted to €4 million.
Equity instruments available for sale 11,749 13,636 13,636 2,291 404 13,970 18,760 18,760 4,928 138
(c) Includes debt instruments issued by companies in which a State now holds interests following the 2008 fi nancial crisis.
TOTAL – FINANCIAL INVESTMENTS EXPOSED TO CASH FLOW INTEREST RATE RISK 1,767 5,770 14,911 22,448
9.8.2. Change in impairment on invested assets (excluding investment in real estate properties)
In 2010, the change in other reserves was due to the redemption of undated subordinated debt (€33 million) in accordance with the redemption option granted to the issuer ten years after the issue date, €-300 million in interest expenses related to the undated subordinated debt (net of tax), and €+332 million in exchange rate differences.
Less unrealized gains and losses attributable to: Shadow accounting on policyholders’ participation (6,855) (5,801)
decrease in actuarial gains and losses on employee benefi t obligations were the United Kingdom (€-154 million), the United
The €1,799 million decrease in minority interests to €2,371 million was due to transactions with shareholders’ for €-1,618 million mainly resulting from AXA APH transaction
The comprehensive income for the period notably included the following: ■ net income attributable to minority interests for €+193 million; ■ change in translation reserves for €-310 million mainly driven by Australia; ■ reserves relating to changes in fair value through shareholders’
Claim reserves as of January 1 35,176 8,833 44,009 33,678 8,776 42,454
Gross claim reserves as of December 31 (b) 35,579 8,388 43,967 36,408 9,067 45,476
(c) Includes: future policy benefi ts reserves (including shadow accounting reserves), unearned premiums reserves, unexpired risk reserves, claims reserves, claims expense reserves, other policy benefi ts reserves. Excludes: unearned revenues and unearned fees reserves, liabilities from policyholders’ participation.
Gross reserves for unpaid claims and claims expenses developed initially at the booking date (a) 5,868 4,778 4,200 3,314 4,523
Property & Casualty and International Insurance (excluding Colisée RE (ex AXA RE)) (a) 45,946 46,367
(a) Total gross claims and other reserves developed are presented on the basis of the loss reserves development table. The reserves of AXA Corporate Solutions Insurance US were included in Property & Casualty and International Insurance loss reserves. The reserves of Mosaic Insurance Company (ex AXA RE P&C Insurance Company) and Coliseum RE (ex AXA CS Reinsurance Company) (€92 million in 2011, €118 million in 2010) were included in Colisée RE’s (ex AXA RE) loss reserves development table.
The following table shows liabilities and assets arising from policyholders’ participation as of December 31 2011.
The surrender value of contracts including a surrender option as of December 31, 2011 amounted to approximately €243 billion, the main difference between expected cash fl ows shown above and such value refl ecting the impact of discount and surrender penalties.
were discounted, of which 11% were subject to a revision of the discount rate and 78% retained the rate set at inception, subject to the liability adequacy test described in Note 1.
Non Life – locked-in discount rate (b) 4,182 3.87% 4,112 3.91%
The fair value of fi nancing debt as of December 31, 2011, excluding accrued interests, was €10,133 million, including related hedging derivative instruments. The fair value decreased by €1,142 million compared to December 31, 2010 mainly due to the increase in credit spreads in the period.
Payables arising from direct outward reinsurance operations 5,179 5,179 5,916 5,916
Tax losses of prior years used in the current year without DTA recognized previously (23) (34)
In 2011, impact of the goodwill reduction of the US activities which is not tax deductible was partly offset by the reduced taxation of capital gains in respect of the stake in Taikang Life and Australian and New Zealand operations disposals.
The decrease of tax losses carried forward in 2011 mainly concerns the Company following their utilization.
Sub-total currencies derivatives 94,395 47,656 8,990 3,775 5,461 6,295 Total return swaps 7,366 17 3 3 13 2,267
swap contracts to manage foreign-currency denominated cash fl ows or investments (see note 20.2.4).
(iii) in Switzerland Life & Savings for €1,923 million (€2,831 million at the end of 2010) including €1,819 million (€1,662 million at the end of 2010) used to protect the reinvestment risk in the Individual Life & Savings business, (iv) in Belgium Life &
Futures are contracts that require settlement at a specifi ed price and on a specifi ed future date and can be traded in same markets. Forwards are customized contracts between two entities where settlement takes place on a specifi c date in the future at today’s pre-agreed price.
Equity securities designated as at fair value through profi t or loss 5,755 - - 5,755
Principles applied by the Group in order to proceed with the classifi cation of fi nancial instruments into the IAS 39 fair value hierarchy categories and the fair value hierarchy applicable to such instruments are described in note 9.9. Same principles apply as far as derivatives instruments are concerned.
Non quoted debt instruments (amortized cost) 110 - - - 110
Investment Portfolios” as defi ned in Note 1.7.2; ■ changes in fair value of underlying hedged items in fair value hedges (as designated by IAS 39) or “natural hedges” (i.e.
(the effects of differences between the previous actuarial assumptions and what actually occurred) and changes in actuarial assumptions. They also include differences between the expected and actual returns on plan assets and separate assets.
Unrecognized past service cost represents non-vested benefi ts on the date of a change in the amount of benefi ts following an amendment to the plan. It is amortized on a straight-line basis over the average remaining vesting period.
In 2011, the main change in the scope was the sale of
Actual return on plan assets 322 544 516 (1,498) 477 (1) - (0) (1) (3)
Net transfer In/(Out) (including acquisitions and disposals) (a) (b) (13) 21 58 48 (1,724) - - - - -
Adjustment due to separate assets (7) (70) (41) 15 (23) - - - - -
Benefi ts paid by separate assets 90 71 66 64 60 - - - - -
Amount subscribed by employee (in euro million) 19.1 31.4 20.8 31.0
Before 2010, if the number of Performance Units defi nitely acquired was less than one thousand, the employing entity paid in cash, 100% of the calculated value. If the number of Performance Units defi nitely acquired was more than one thousand the employing entity paid in cash, 70% of the calculated value and the remaining 30% was simultaneously invested on behalf of the benefi ciaries in AXA shares restricted for a minimum period of two years (equity-settled).
Under the Incentive Compensation Program, AllianceBernstein made awards in December 2011 aggregating €115.4 million of which €94.5 million in the form of Restricted Holding units, elected in January 2012 and representing 8,747,430 restricted
Net income per ordinary share takes into account interest payments related to undated subordinated debts classifi ed in shareholders’ equity.
In addition, the Company may enter into various other types of transactions with its subsidiaries and affi liates from time to time for various other business purposes including in connection with liquidity, solvency and capital management initiatives designed to promote effi cient use and fungibility of the Group’s capital resources. These transactions may involve loans or other types of credit arrangements, acquisitions or sales of assets, securities or other fi nancial instruments (including swaps or other types of derivatives), securitization transactions, and/
The € 2,534 million decrease in other commitments received was mainly from € 2,278 million decrease in AXA Bank Europe due to money market activities.
(€2,929 million) including €2,710 million loans guarantees and €209 million backing IT contracts; ■ €269 million guarantee commitments given to customers mainly from German Banks (€125 million) related to mortgage loan.
and pledged assets collaterals for loans (€4,528 million); ■ €13,192 million in AXA France including €11,176 million from Life & Savings due to pledged assets for securities repurchase agreements (€10,166 million) and derivative transactions (€1,010 million), as well as €2,016 million from
L.P.) is included in the Annual Reports on Form 10-K for the year ended December 31, 2011 and subsequent reports on Form 10-Q, respectively, of AXA Equitable Life Insurance
For additional information regarding the powers of the Board of Directors, please see Part 2 – “Corporate governance, executive compensation, major shareholders and related matters” of this Annual Report.
This report presents, according to the provisions of Article L.22537 of the French Commercial Code, the composition of the
Executive Managers report signifi cant internal control and risk related issues to the Audit Committee of the Board of Directors on a regular and continuing basis to ensure that the Committee and the Board of Directors have a clear view of material issues facing the Group.
Audit Committee plays a particularly important role in reviewing internal control and risk related issues.
Accounting and fi nancial information is consolidated in accordance with International Financial Reporting
The Group Audit function fulfi ls its responsibilities as follows: ■ setting standards of internal audit practice for local internal audit functions to follow; ■ actively reviewing the quality and performance of the local internal audit teams across the Group to ensure that they meet AXA Group standards; ■ reviewing and coordinating local internal audit resources and planning to ensure effective coverage; ■ performing internal audits of the Group’s Head Offi ce activities and on any topics selected by the Group Audit
Section 23 of AXA’s Charter (statuts), copies of which are available at the Paris Trade and Companies Register (Registre du commerce et des sociétés du tribunal de commerce de
In our capacity as Statutory Auditors of AXA, and in accordance with Article L.225-235 of the French Commercial Code, we hereby report to you on the report prepared by the Chairman of the Board of Directors of your Company in accordance with Article L.225-37 of the French Commercial Code for the year ended December 31, 2011.
(France) until the fi ling of AXA’s next Annual Report (Document de Référence): ■ the Charter of the Company; ■ the reports and other documents prepared by any expert at the Company’s request, any part of which is included or referred to in this Annual Report; ■ the parent Company fi nancial statements as well as the consolidated fi nancial statements of the Company for each of the two fi nancial years preceding the publication of this Annual Report.
USE IN 2011 OF THE VARIOUS FINANCIAL AUTHORIZATIONS PERTAINING TO CAPITAL INCREASES
Capital operations resulted in a profi t of €3,676 million in 2011, versus a loss of €1,778 million in 2010 on a comparable basis, and broke down as follows: ■ disposal gains of €4,922 million in 2011, including a €3,418 million gain on the sale of shares in AXA Asia Pacifi c Holdings to Australia Mutual Provident and a €1,504 million gain on the sale of the Canadian businesses; ■ a €329 million foreign-exchange loss resulting from the euro’s depreciation against currencies including the Japanese yen and the Swiss franc, along with the renewal of hedges that matured or were unwound during the year; ■ other allowances for provisions for contingent liabilities totaled €1,086 million. Of this, €786 million corresponded to unrealized losses on derivatives including €530 million for the mark-to-market revaluation of an intra-group equity swap intended to hedge an equity position, the annual allowance of €104 million for provisions for bond redemption premiums, and a €125 million allowance due to the restructuring of the participation in Bharti AXA Life Insurance Co.Ltd. In 2010, an allowance of €445 million had been booked, including €214 million related to the mark-to-market revaluation of the equity swap and €101 million in respect of the annual allowance for provisions for redemption premiums on subordinate bonds; ■ net exceptional items included a €134 million profi t on the unwinding of equity derivative positions.
Canada at their book value of €930 million; ■ and the cancellation of €455 million of AXA Participation II
Unrealized foreign exchange losses amounted to €852 million, of which €512 million related to the deferred recognition of exchange-rate losses in line with the principles of hedge accounting. This item refl ects unrealized losses on receivables and debts denominated in foreign currencies arising from their revaluation at the balance-sheet closing exchange rate.
December 31, 2010, it amounted to €4 million which is due within three months.
The fi nancial statements as at December 31, 2011 are prepared and presented in accordance with the provisions of the 1999
AXA’s share capital is represented by 2,357,197,520 shares with a par value of €2.29, giving a total value of €5,397,982,321.80 at December 31, 2011.
The information on fair value presented above should be used with care: ■ since these estimates are based on the use of measurements such as interest rates and spreads at the balance sheet date; such measurements may fl uctuate over time;.
in 2011 compared to 24% in 2010, the decrease being driven by the higher opening value in 2011 compared to 2010, and a signifi cant operating return in Life & Savings in 2010.
Total return on Group EV decreased to -5% in 2011 compared to 16% in 2010. The main driver of lower return was the lower investment experience, refl ecting certain deteriorated market conditions.
Total Return on Life & Savings EEV (before currency effects and capital fl ows) of €-2,604 million combines the Operating
Approval of the consolidated fi nancial statements for the fi scal year 2011
Appointment of a new member of the Board of Directors (resolution 6) The Board of Directors, upon recommendation of its Ethics
Once these consultations were completed, eight candidates were selected under the “direct” process (for each of these candidates, the percentage of votes received during the voting process is indicated): Mrs. Fewzia Allaouat (4.97%),
However it should be noted that in the event several resolutions numbered from 7 to 14 receive more votes in favo r than the majority of all the votes cast by the shareholders present at the Meeting or duly represented, only the resolution receiving the highest number of votes in favo r would be considered as having passed; the other resolutions in the aforementioned series being considered as rejected.
The Board of Directors may also, in accordance with applicable laws and regulations, reallocate repurchased shares with regard to one or several objectives of the program, or transfer repurchased shares, it being specifi ed that these reallocations and transfers may concern shares repurchased pursuant to previous authorizations.
April 27, 2011 are presented in section 2.2 “Full disclosure on executive compensation and share ownership” (E mployee shareholders) and in Appendix VIII (Supplemental report by the
The purpose of such capital increase would be to allow the employees, executive offi cers or general agents of the AXA
In addition, the effect of this issue on the interest in consolidated shareholders’ equity on June 30, 2011, for a shareholder holding one AXA share and not subscribing to the increase in capital is as follows: ■ in the event where the entire offer is subscribed to under the traditional formula: Interest in consolidated shareholders’ equity on June 30, 2011 (per share)
Meeting called in 2016 to approve the fi nancial statements of the preceding fi scal year.
Appointment of Mrs. Fewzia Allaouat to the Board of Directors upon proposal of the employee shareholders of the AXA Group The shareholders, having fulfi lled the quorum and majority requirements pertaining to ordinary general s hareholders’
■ hereby appoint Mr. Herbert Fuchs to the Board of Directors for a term of four years which will expire at the end of the
■ hereby appoint Mr. Rodney Koch to the Board of Directors for a term of four years which will expire at the end of the
These percentages are applicable to an adjusted number of shares, where appropriate, depending on the transactions that may affect the share capital after the date of this
m eetings, having reviewed the Board of Directors’ report and the Statutory Auditors’ special report and in accordance with the law, and in particular the provisions of Articles L.225-129 et seq. and L.225-138-1 of the French Commercial Code and
Company has an ownership interest in the latter; is an unlimited partner, manager or trustee; is a member of its s upervisory b oard; or, in general, is a director and/or offi cer therein.
shall from now on be drafted as follows: “If the Board of Directors authorizes, at the time of the n otice of m eeting, the transmission of the proxy and voting forms by electronic means, the online signature of these forms could result from a secured identifi cation process, ensuring the shareholder’s link with the voting form to which the signature is attached. The voting forms completed electronically prior to the meeting, as well as the acknowledgement of receipt that will be given in reply, will be considered as irrevocable and opposable written proofs. The proxy is however revocable in the same conditions as the ones requested for the appointment of the shareholder representative. In the event shares are sold or otherwise legally transferred before the third business day preceding the Shareholders’ Meeting at 0: 00 am Paris time, the Company shall invalidate or modify accordingly, as the case may be, the proxy or voting form completed online prior to the meeting ”.
Swiss Re. In December 2011, Mr. Stefan Lippe announced he would step down from his role as Chief Executive Offi cer of Swiss Re (effective February 1st, 2012) and retire in 2012.
■ Chairman of the s upervisory b oard of the mutual fund AXA
Number of AXA shares and/or number of units in AXA Mutual funds invested in AXA s hares held on December 31, 2011: 2,525
Number of AXA shares and/or number of units in AXA Mutual funds invested in AXA s hares held on December 31, 2011: 7,371
■ Advanced technician’s certifi cate (BTS) in accounting systems and business management
Professional Certifi cations: Passed Certifi ed Public Accountant Exam (not licensed), CLU,
■ Ecole Nationale des Ponts et Chaussées Paris Tech - Civil engineer
■ Voluntary worker for the local Social & Economic Counsel of the city of Boulogne-Billancourt
■ General Secretary of AXA France (2008-2010); and Head of offi ce of François Pierson, AXA France’s Chairman &
adopted in May 2001, the following information describes the manner in which the Company takes into account the social and environmental impacts of its activities.
which AXA owns, as of December 31, 2011 directly or indirectly with at least 10% of the capital or voting rights, and has the management control independently or acting in mutual with a third party, according to the meaning of Article L. 233-3 of the
in 2010), 12% in the Americas (vs. 15% in 2010) and 3% in
These agreements include for example a transition agreement for retirement which enables the implementation, at the end of a career, of part time work schedules followed by special retirement planning; an agreement on 2010-2012 recruitment targets; an addendum agreement facilitating and protecting the career development of employees who choose to become employee representatives; or agreements on the employee participation mechanism (which includes environmental targets), retirement schemes, and 3-years remuneration schemes.
Local initiatives Several local AXA entities include environmental considerations in their profi t sharing agreement. For example, the multiyear profi t sharing agreements covering the employees of
In AXA Asia, as part of employee engagement programs, the region implemented a number of “Reward & Recognition”
In 2007, a global IT initiative called “People In’” was launched in order to bring together and support the OTR, Performance
It must be used by each AXA entity to cover 100% of its employees, at least once a year. This ensures that the Group’s performance-based remuneration policy and evaluation of training needs runs effi ciently.
AXA Research Fund, the AXA-CARE global partnership, and local risk prevention projects.
Auditors, reviewed the social reporting process, as well as the data and collection processes of 10 entities (6 in Europe, 2 in
■ Average FTE of experts & staff 70,647.0 fte 75,650.5 fte
Net headcount evolution (salaried workforce entries versus salaried workforce departures) -6,553 emp. -2,634 emp.
Net headcount evolution of non sales force (entries versus departures) 586 emp. 1,671 emp.
Working time (non sales and sales force, part-time and full-time, open-ended contract only)
AXA’s direct operations, focusing on fi nancial services, do not signifi cantly impact the environment. AXA does not produce any signifi cant emissions into air, water and soil, with the exception of CO
AXA’s operations and land use do not signifi cantly threaten biodiversity.
Local entities have developed various initiatives to reduce their power consumption. These include for example the rolling out of a “Green IT” strategy, initiated in 2008 by AXA Technology
emissions. Finally, employees are to be provided with easy access to video conferencing facilities and online conference tools to the extent possible.
reduction between 2009 and 2012. This printing policy includes reducing the number of printers, and installing an employee badging system to collect all printed documents. In addition, both the GIE and AXA France put in place a profi t sharing agreement that include offi ce paper consumption metrics.
Responsible Investment. This initiative meets a growing investor demand and reinforces the transparency of the investment and management processes of AXA IM’s RI funds. Deloitte experts analysed the principles used to manage portfolio construction as well as the procedures and mechanisms related to the investment process. Subsequently, the consultants verifi ed the construction of the portfolio and the transactions carried out over the course of the previous year for each fund. Given the lack of globally recognised and shared RI standards, with this initiative AXA IM aims to reinforce the internal rules that govern the investment choices of its RI managers and ensure that these rules are abided by. By making these rules public,
(d) Home/workplace commute estimations are based on an annual online transportation survey, issued to every AXA salaried employee. This data has been collected from 23,583 FTEs and then extrapolated. Sites whose response rate was below 5% have been excluded from the data consolidation process.