Unless otherwise specifi ed, various amounts in this document are shown in millions for presentation purposes. Such amounts have been rounded. Rounding differences may also exist for percentages.
(a) Proposal to be submitted to the Shareholders’ Meeting to be held on April 27, 2016.
AXA originated from several French regional mutual insurance companies: “les Mutuelles Unies”.
Sale by (i) AXA Investment Managers of a majority stake in AXA
AXA’s social, societal, and environmental and governance performance is rated by a number of specialists, including investors, brokers and rating agencies that focus specifi cally on the socially responsible investment (SRI) market. AXA is ranked above the average for its industry and is included in the three major global ethical indices: ■ DJSI World and DJSI Europe (based on RobecoSAM
(b) Includes Spain, Italy, Portugal, Greece, Morocco, Turkey, Mexico, Colombia and the Gulf Region.
In addition, AXA Global P&C provides reinsurance services to AXA’s insurance subsidiaries (see Section “International
(1) Ranking established by AXA based on information available for the year 2015.
Casualty insurance products such as France, Mediterranean and Latin American Region, Belgium, the United Kingdom and
Japan, but picked up in the UK. The modest increase in new business was mainly driven by sales of Protection products, while the savings business was pressured by low interest rates, equity market volatility, and pension reforms such as in the UK.
Germany Life 8 3.8 Market Factbook 2014. 2015 information not available.
Hong Kong 5 8.1 5 9.0 Offi ce of Commissioner statistics as of September 30, 2015 and December 31, 2014 based on gross written premium for the individual life in-force business.
Indonesia 2 9.8 2 10.3 AAJI Statistic as of September 30, 2015 and December 31, 2014 measured on Weighted New Business Premium.
In 2015, the global Property & Casualty (P&C) market experienced a slower growth than in 2014 both in mature and high growth markets, continuing the downward trend from last year, driven by softening prices, notably in Commercial lines.
Ireland 1 Central Bank of Ireland Statistical Review 2014. 2015 information not available.
Portugal 7 6.2 4 7.4 ASF (Autoridade de Supervisão de Seguros e Fundos de Pensões) as of December 31, 2015 and December 31, 2014.
Meanwhile, they increased their exposure in the European markets. Their appetite for fl exible multi-assets products has remained unabated over the year. More specifi cally in the US, investors have increased the international diversifi cation of their equity portfolios.
States, the CDX Main spread Index increased by 22 bps to 88 bps.
(8) Source: Philippines Insurance Commission/2014 average forex rate EUR 1 = PHP 58.98.
Rio and South Brazil, thus complementing AXA CS Brazil’s current coverage of the Sao Paulo state and accelerating its development. Moreover, SulAmérica’s highly experienced underwriting teams would reinforce AXA’s local expertise and know-how.
On April 28, 2015, AXA Global Life announced the successful placement by a newly formed Irish special purpose vehicle
AXA defi ned a clear framework for its capital management policy, with a 170%-230% as Solvency II ratio central target range. AXA also indicated that it targets to pay aggregate dividends in a general range of 45% to 55% of Adjusted
On October 29, 2015, S&P reaffi rmed the fi nancial strength ratings on AXA Group core subsidiaries at ‘A+’ with a positive outlook.
Following a comprehensive succession planning process led by AXA’s Compensation and Governance Committee, at a special Board meeting held on March 19, 2016, AXA’s Board of Directors unanimously decided to separate the functions of Chairman of the Board of Directors and Chief Executive
and a member of AXA’s Board of Directors coopted to replace
Life & Savings underlying earnings amounted to €3,503 million. On a reported basis, Life & Savings underlying earnings were up €371 million (or +12%). Excluding Colombia and on a constant exchange rate basis, Life & Savings underlying earnings increased by €99 million (or +3%) mainly attributable to France (€+56 million), the United Kingdom (€+40 million),
(€+43 million in 2015 vs. €+15 million in 2014) while tax oneoff remained stable in the United States (€104 million in 2015 vs. €128 million in 2014).
• as a result, the combined ratio improved by 0.6 point to 96.2% while current year combined ratio improved by 0.2 point to 97.3%; ■ lower investment result (€-161 million or -8%) primarily driven by (i) France (€-87 million) mainly due to the nonrepeat of exceptional distributions from Mutual funds in 2014 (€-71 million) and (ii) Germany (€-35 million) with lower reinvestment yields as well as the non-repeat of an exceptional interest profi t on a tax claim in 2014; ■ higher tax expenses and minority interests (€-43 million or +5%) driven by higher pre-tax underlying earnings and the unfavorable effect of the increase in tax rate in Italy.
As of December 31, 2015, consolidated shareholders’ equity totalled €68.5 billion. The movements in shareholders’ equity since
APE increased by €183 million (+12%) to €1,767 million: ■ Unit-Linked sales (20% of APE) increased by €73 million
On a constant exchange rate basis, underlying earnings increased by €40 million.
Income tax expenses decreased by €10 million (-5%) to €-180 million. On a constant exchange rate basis, income tax expenses decreased by €16 million (-9%) due to a positive impact following the decrease in corporate tax rate, partly offset by higher pre-tax underlying earnings.
Adjusted earnings increased by €54 million (+15%) to €411 million. On a constant exchange rate basis, adjusted earnings increased by €39 million (+11%) mainly due to higher underlying earnings.
Profi t or loss on fi nancial assets (under FV option) & derivatives (5) 50
Net capital gains or losses attributable to shareholders net of income tax 62 111
As a result, the underlying cost income ratio decreased by 5.0 points to 50.7%.
Investment margin increased by €5 million (+2%) to €246 million. Excluding Colombia and on a constant exchange rate basis, investment margin decreased by €1 million.
MPS and Mexico mostly due to higher commissions, in line with volume growth.
Amortization of VBI increased by €5 million to €-18 million. On a constant exchange rate basis, amortization of VBI increased by €2 million mainly due to one-off assumption changes.
Underlying earnings increased by €71 million (+25%) to €353 million. On a constant exchange rate basis, underlying earnings increased by €15 million (+5%).
Net capital gains or losses attributable to shareholders net of income tax 10 (2)
(a) Before intercompany eliminations. Gross Revenues amounted to €4,792 million net of intercompany eliminations as of December 31, 2015.
Net technical result increased by €155 million (+12%) to €1,438 million. On a constant exchange rate basis, net technical result increased by €26 million (+2%): ■ the current year loss ratio increased by 0.6 point to 69.8%
As a result, the combined ratio was down 0.7 point to 97.6%.
Cat event) and higher claims handling costs, partly offset by lower Nat Cat events; ■ the all accident year loss ratio decreased by 1.1 points to 65.4% mostly due to higher positive prior year reserve development, mainly in Property.
Income tax expenses increased by €18 million (+13%) to €-165 million due to higher pre-tax underlying earnings.
As a result, the combined ratio improved by 3.1 points to 86.0%.
Gross revenues decreased by €22 mil l ion (-1%) to €2,029 million: ■ Personal lines (50% of gross revenues) were down €2 million to €1,023 million mainly driven by negative net new contracts, partly offset by tariff increases; ■ Commercial lines (48% of gross revenues) were down 2% to €977 million mainly due to less favorable premium adjustments principally in Workers’ Compensation; ■ Other lines (2% of gross revenues) were down 2% to €40 million.
(+9%) to €2,355 million mainly driven by improved retention and higher new business in the United Kingdom (€+57 million or +12%), tariff increase with a high renewal rate in South
(ii) Motor (€+16 million) as a result of positive new business growth notably refl ecting the increase in both private car and motorcycle sales in Malaysia; ■ Commercial lines (51% of gross revenues) were up €35 million
Expense ratio decreased by 0.7 point to 15.8% refl ecting a strict control of expenses in a context of revenues growth.
Net income decreased by €15 million to €24 million. On a constant exchange rate basis, net income decreased by €14 million driven by lower adjusted earnings.
Underlying earnings and adjusted earnings increased by €1 million to €5 million, as the signifi cant improvement in cost of risk and the increase in operating net banking revenues were partly offset by the increase in operating expenses to support business growth.
The Holdings and other companies consist of AXA’s non-operating companies, including mainly the AXA parent company, AXA France
Holdings) in the context of a lower interest rate environment, largely offset in the AXA US Holdings segment, as well as
On a constant exchange rate basis, net income increased by €3 million (+5%) mainly driven by higher adjusted earnings as well as the non-repeat of 2014 acquisition and integration costs, partly offset by a one-off receivable write-off.
Underlying Net Technical margin includes the following components: ■ mortality/morbidity margin: t he 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; ■ surrender margin: t he difference between the benefi t reserve and the surrender value paid to the policyholder in the event of early contract termination; ■ GMxB (Variable Annuity guarantees) active financial 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; ■ policyholder bonuses if the policyholder participates in the risk margin; ■ ceded reinsurance result; and
operating margin, where “Underlying” operating margin is the sum of (i) Underlying Investment margin, (ii) Underlying Fees and revenues, and (iii) Underlying Net technical Margin (all items defi ned above).
AXA has a robust liquidity risk management framework that it reviews on a regular basis. Its assessment is performed through a quarterly monitoring of liquidity and solvency requirements in stressed environments both at local and Group level. At yearend 2015, Group entities held, in this aggregate, more than €190 billion government bonds issued by Eurozone countries, which enables them to address local liquidity needs through highly liquid assets. AXA SA also held €12.7 billion of committed undrawn credit lines at year-end 2015. The Group has its own liquidity requirements which are mainly coming from solvency needs of Group entities under severe stress scenarios and collateralized derivatives held by AXA SA. The derivatives book is monitored and managed on a daily basis by the AXA Group
The solvency margin calculation is based on a formula that contains variables related to economic, fi nancial and technical parameters.
On October 29, 2015, S&P reaffi rmed the A+ financial strength rating on the core operating entities of the AXA Group and the
Finally, the Board made clear that its decision to continue with the Company’s current governance structure (a unitary Board with the roles of Chairman & Chief Executive Offi cer combined)
In order to ensure that the personal interests of the members of the Board of Directors and those of the Company are appropriately aligned, the Board’s Bylaws provide that each member of the Board of Directors must hold, within two years following his/her fi rst appointment, a number of AXA shares with a value at least equal to the director’s gross fees earned in respect of the previous fi scal year. For this purpose, AXA
Governance Committee. In particular, he was involved in the selection process of the future members of the Board and
The proportion of women within the Board of Directors was 36% at December 31, 2015, in compliance with the provisions of law n° 2011-103 of January 27, 2011 and with the recommendations of the Afep-Medef Code regarding gender balance within b oards. Following the Shareholder s’ Meeting of
(Article L.225-23 of the French Commercial Code (Code de commerce)). The presence, since 2004, of an employee shareholder representative within the Board helps enrich the
Stefan Lippe (60) Co-founder and Chairman of the Board of Directors of Paperless Inc. (Switzerland) and co-founder and Vice-Chairman of the Board of Directors of Acqupart Holding AG (Switzerland) Baarerstrasse 8 – CH 6300 Zug – Switzerland German and Swiss nationalities
Subject to the approval of the Shareholders’ Meeting, the Board of Directors will consequently be comprised of sixteen members including twelve members considered independent by the Board of Directors in accordance with the criteria of the Afep-Medef
Offi cer of GDF SUEZ, which became ENGIE on April 2015.
Law, where she also chairs the group on Legal Education and
Expert Panel Centre of Cross-Border Commercial Law in Asia and a trustee for Nanyang Technological University as well as a
Offi cer of Swiss Re. In 2009, he was appointed Chief Executive
Offi cer of Swiss Re and stayed in this function until January 2012.
(3) the organization of the reports made by Committee Chairmen to the Board of Directors, and (4) installing regular reporting at Board meetings from the Lead Independent Director on his actions and formal or informal meetings with the members of the Board and the Executive Management.
The Deputy Chief Executive Officer, the Group Chief Financial Offi cer, the Group Head of Audit, the Group Chief Risk Offi cer, the Group Chief Accounting Offi cer as well as the Company’s Statutory Auditors attend each Audit Committee meeting. The Group General Counsel also attends the Committee’s meetings on a regular basis.
(reports from Internal Audit, from Compliance department, on Litigation, on Risk Management, from Group IT security – cyber risk, on the Group’s Internal Financial Control (IFC) function, and on the Global Business Lines…); ■ Solvency II and ORSA (Own Risk and Solvency Assessment) report; ■ Risk Management Framework, Risk Appetite and Reporting; ■ the results of internal and external audit work; ■ the internal and external audit plans and resources; and
■ To examine and issue an opinion on any plan that intends to set up sureties or grant guarantees, endorsements and warrantees in favor of third parties, when their value exceeds the authorizations granted to the Chairman & Chief Executive Offi cer by the Board of Directors; ■ To examine and issue an opinion on any of the following plans: • to issue securities giving a claim, whether directly or indirectly, to the Company’s share capital,
Messrs. Henri de Castries and Denis Duverne to fi nalize AXA’s new strategic plan, and to ensure an effective leadership transition.
The Executive Committee holds quarterly meetings to assess the status of Group transversal projects and monitor the implementation of the strategic plan. These meetings are also an opportunity to exchange ideas and best practices, including through the participation of external guests on topics of strategic interest.
In this context, the overall remuneration structure is based on the following components, which are designed to provide balance and avoid excessive risk taking for short term fi nancial gain: ■ a fi xed component which comprises guaranteed elements, such as base salary and any other fi xed allowances. It takes into account the position, responsibilities, experience, market practices , technical skills and leadership competences, and also sustained individual performance and criticality or scarcity of skills; ■ a variable component which comprises an upfront cash element (Short Term Incentive) and a deferred element which is awarded through equity based instruments or equivalent such as stock options and/or performance shares (Long
Group (insurance and banks) which are principally based in the main European markets (Belgium, France, Germany, Italy, the Netherlands, the United Kingdom, Spain and Switzerland).
Variable compensation for the year 2005 paid in 2006 €2,000,000 €2,671,626 134%
(a) This amount includes the part of the variable compensation with respect to 2013, 2014 and 2015 which has been deferred in accordance with the mechanism described on page 120 . The total amount paid will depend on performance conditions and may then vary.
In reviewing the Group component of the variable compensation of Messrs. Henri de Castries and Denis Duverne, the
SUMMARY OF THE MANAGEMENT COMMITTEE MEMBERS’ COMPENSATION FOR THE YEAR 2015
(a) This amount does not include the part of variable compensation with respect to 2014 which has been deferred in accordance with the mechanism described on page 120 .
Compensation & Governance Committee which especially takes into consideration the aggregate elements of compensation of the executive as well as the market studies carried out by the
or purchased, from which to be subscribed or purchased by: Executive Directors: Start date of exercise 29/03/2007 29/03/2007 06/06/2007 27/06/2007 01/07/2007 21/09/2007 31/03/2008 31/03/2008 31/03/2010 25/09/2008
Grant date (Board of Directors or Management Board) 25/09/2006 13/11/2006 10/05/2007 10/05/2007 10/05/2007 24/09/2007 24/09/2007 19/11/2007 19/11/2007 01/04/2008
Subscription or purchase price of options (a) 12. 22 14. 73 14. 73 14. 73 12. 22 9. 36 13. 81 18. 68 22. 90
Following AXA’s change of governance structure in 2010, the Board of Directors, acting upon recommendation of its
Treasury shares held directly by the Company 1,491,713 0.06% [1,491,713] (c) [0.05%] (c) 49,719 0.00% [49,719] (c) [0.00] (c) 54,079 0.00% [54,079] (c) [0.00]% (c)
Act) set several prescriptive guidelines for derivatives which impact operations, liquidity and credit risk management for derivatives. AXA’s asset managers and banks, which manage derivatives on behalf of various AXA Group affi liates (including on behalf of AXA SA), are currently operating in conformity with these new rules (or preparing for their implementation) and the
The contemplated policy measures include the constitution of a Crisis Management Group (“CMG”) by the Groupwide supervisor, the preparation of the above-mentioned documents (SRMP, LRMP and RRP) and the development and implementation of the BCR in 2014, while other measures are to be phased in more gradually, such as the HLA (the fi rst version of which was endorsed by the FSB in October 2015 but which is expected to be revised before its implementation in 2019).
While these developments may potentially hinder the possibility for European based companies, including the Group, to transfer data into the United States, the Group expects that it may continue to rely on the other mechanisms cited above.
Solvency II must adopt a written remuneration policy compliant with a number of principles set out in the Commission Delegated
In the event of a failure by the Company and/or any of its insurance subsidiaries to meet minimum regulatory capital requirements, insurance regulators have broad authority to require or take various regulatory actions including limiting or prohibiting the issuance of new business, prohibiting payment of dividends or other shareholder distributions, and/or putting a company into rehabilitation or insolvency proceedings. A
(including Note 1.7.1 “Goodwill and impairment of goodwill”) and an analysis of the goodwill asset refl ected on our consolidated balance sheet is set forth in Note 5 “Goodwill” to the 2015
AXA’s insurance gross premiums and fi nancial services revenues, as well as AXA’s benefi ts, claims and other deductions were denominated in currencies other than the Euro, primarily US
RISKS RELATING TO THE STRUCTURE OF OUR GROUP, THE SCOPE AND NATURE OF OUR BUSINESS, THE PRODUCTS WE OFFER AND OUR OPERATIONS AND SYSTEMS
AXA RE Arizona has adequate liquidity and credit facilities to deal with a range of market scenarios and increasing reserve but there can be no assurance that AXA RE Arizona will have suffi cient liquidity in all scenarios. In the event AXA RE Arizona were not able to post required collateral or cash to settle such hedges when due, it may be required to reduce the size of its hedging program which could ultimately impact its ability to perform under the reinsurance arrangements and AXA US’s ability to receive full statutory reserve credit for the reinsurance arrangements.
Designation of the AXA Group as a Global Systemically Important Insurer (“GSII”) and other regulatory developments may adversely impact our capital requirements, profi tability, the fungibility of our capital, our ability to grow through acquisition and our overall competitive position
Local Chief Risk Offi cers have a regular reporting to the Board of
AXA is exposed to fi nancial market risks through its core business of fi nancial protection (i.e. insurance and asset management)
Local operating units have the primary responsibility for managing their fi nancial risks (market risk, credit risk, liquidity risk), while abiding by the risk framework defi ned at Group level, in terms of limits/ thresholds and standards. This approach aims to allow operating units to react swiftly in an accurate and targeted manner to changes in fi nancial markets, political and economic environments in which they operate.
AXA France offsets its exposure to exchange-rate risk by using foreign exchange forwards and other derivatives (notional of €12,104 million in 2015 versus €12,837 million in 2014).
■ International Insurance business (2% of Group assets at the end of 2015 versus 2% in 2014): In the course of its business, AXA Corporate Solutions Assurance carries some insurance liabilities denominated in foreign currencies, particularly in US Dollar (€933 million at the end of 2015 versus €997 million in 2014) and, to a lesser extent, Pound
mortgage loans of approximately €0.8 billion (5% of its total equaling or above AA rating).
In order to build adjusted and optimized protection, the Group’s operating entities are reinsured by AXA Global P&C. AXA
The breakdown of the Group’s Life & Savings technical insurance reserves by product type was as follows: ■ 23% at the end of 2015 (22% at the end of 2014) of the
Based on the Solvency II defi nition, AXA defi nes o perational risk as the risk of loss arising from inadequate or failed internal processes, personnel or systems or from external events.
Operational risk includes legal risks and excludes risks arising from strategic decisions, as well as reputation risks.
By developing relationships with researchers and supporting innovative projects in environmental, socio-economic and life risks, the AXA Research Fund (see appendix VII) is a key contributor to AXA’s commitment to better understand the evolution of these risks.
Departments. They use methodologies and modelling tools that develop deterministic and stochastic scenarios, embedding policyholders’ behaviour considerations for the liabilities, fi nancial market evolution for the assets and taking into account existing interaction between the two. This process aims at maximizing expected returns given a defi ned level of risk. Furthermore, a series of additional constraints are taken into account, such as Solvency II internal model considerations, earnings stability, protection of the solvency margin, preservation of liquidity, as well as local and consolidated capital adequacy and requirement.
They independently counter-valuate the derivatives positions so as to get appropriate accounting, payment and collateral management. They also challenge the prices proposed by counterparties in case the AXA entity wished to initiate, early terminate or restructure derivatives. Such capacity in pricing requires high-level expertise, which relies on rigorous market analysis and the ability to follow the most up-to-date market developments for new derivatives instruments.
Share capital and capital in excess of nominal value 26,094 26,610
Liabilities arising from investment contracts with no discretionary participating features 538 481
Change in unearned premiums net of unearned revenues and fees (235) (298)
Others (including impact on change in scope) (b) - - - - -
For debt instruments classifi ed as “held to maturity” or “available for sale”, an impairment based respectively on future cash fl ows discounted using the initial effective interest rate or on fair value is recorded through the income statement if future cash fl ows may not be fully recoverable due to a credit event relating to the instrument issuer. A downgrade of an entity’s credit rating is not, of itself, evidence of impairment. If the credit risk is eliminated or improves, the impairment may be released. The amount of the reversal is also recognized in the income statement.
(in the “other reserves” aggregate). Gains and losses relating to redemptions or refinancing of the equity component are recognized as changes to shareholders’ equity.
If a reinsurance asset is impaired, the Group reduces the carrying amount accordingly and recognizes that impairment loss in the income statement. A reinsurance asset is impaired if there is objective evidence, as a result of an event that occurred after initial recognition of the reinsurance assets, that the Group may not receive all amounts due to it under the terms of the contract, and the event has a reliably measurable impact on the amounts that the Group will receive from the reinsurer.
Financing debt issued to fi nance the solvency requirements of operational entities or to acquire a portfolio of contracts are isolated in a specifi c aggregate of the statement of fi nancial position and are accounted for at amortized cost.
Change in unearned premiums net of unearned revenues and fees 72 (252) (35) - - - (20) (235)
(a) Includes gains/losses from derivatives hedging Variable Annuities within Life & Savings and International Insurance segments.
Portuguese operations at €198 million, representing an implied 1.2x book value multiple as of June 30, 2015. The net cash consideration received by AXA at completion would amount to €191 million.
(a) Amounts are presented net of intercompany balances with other AXA entities for €140m of assets and €120m of liabilities.
The Group is party of repurchase agreements and securities lending transactions under which financial assets are sold to a counterparty, subject to a simultaneous agreement to repurchase these fi nancial assets at a certain later date, at an agreed price. While substantially all of the risks and rewards of the fi nancial assets remain with the Group over the entire lifetime of the transaction, the Group does not derecognize the fi nancial assets. The proceeds of the sale are reported separately. Interest expense from repurchase and security lending transactions is accrued over the duration of the agreements.
Debt instruments available for sale 334,558 (632) 333,926 43,921 377,846 320,720 (788) 319,932 51,802 371,734
Impairment - Non-consolidated investment funds 950 74 (33) - 63 1,054
Financial investments and loans at amortized cost 451 56,006 39,387 95,844 47 51,281 38,983 90,311
Net investment result excluding fi nancing expenses 468 73 160 43
The decrease of gross unrealized gains and losses on assets available for sale totalled €-8,028 million, of which €-7,814 million decrease in unrealized capital gains on debt securities which was mainly driven by interest rates and corporate spreads increase.
At December 31, 2015, most of the unrealized gains on assets available for sale related to the Life & Savings segment, leading to signifi cant movements in shadow policyholders’ participation and other obligations.
Liabilities arising from investment contracts with discretionary participating features 33,142 33,669 of which measured at current assumptions (b) - -
On December 21, 2006, the Group fi nalized an agreement to sell the Colisée RE reinsurance business to Paris RE Holding.
Cumulative Payments to date / Projected Ultimate Cost 46% 45% 43% 42%
Debt component of subordinated convertible notes, 3.75% due 2017 (€) 1,701 1,622
Other fi nancing debt instruments issued (under €100 million) 97 102
Other fi nancing debt instruments issued (under €100 million) 136 155
Payables arising from direct insurance and inward reinsurance operations 9,760 8,831
“Debt relating to investments under lending agreements and equivalent” totaled €25,635 million as of December 31, 2015, an increase of €4,304 million compared with December 31, 2014, or €3,232 million at constant exchange rate, mainly due the increase in repurchase agreements activity in Belgium Life &
Deferred tax Assets/(liabilities) concerning: ■ Reserves relating to the fair value adjustment of available for sale assets 9,058 14,689 (5,630) (6,762)
DTA recognised on tax losses carried forward 216 254 208 254 239 142 252 19 - 1,584
Note 1.8.2) which are recognized at fair value in accordance with the IFRS hierarchy as described in Note 1.5.
As of December 31, 2015, the net fair value (€-628 million) of d erivatives instruments is comprised of the fair value of derivatives on investment assets (€-1,777 million – see Note 20.3) and of the fair value of derivatives on liabilities (€-1,149 million – see Note 20.4).
AXA mainly uses (i) interest rate s waps (57% of total notional amount of interest rate derivative instruments), (ii) interest rate options (25%), and (iii) futures and forwards (17%).
Macro-hedge and other derivatives (507) 1,422 914 (3) (406) (409) (511) 1,015 505
Macro-hedge and other derivatives (265) 1,363 1,098 (0) (165) (165) (266) 1,199 933
Net value of derivative instruments - assets (1) (412) (1,365) - (1,777) (1,822) (486) 0 (2,308)
(b) Change (capitalization and amortization) in deferred acquisition expenses relating to insurance and investment contracts with discretionary participation features and changes in net rights to future management fees relating to investment contracts with no discretionary participation features.
Actuarial (gains) and losses arising from changes in demographic assumptions 64 68 (14) (9) 49 59 Actuarial (gains) and losses arising from changes in fi nancial assumptions (130) 2,540 (33) 74 (163) 2,613 Benefi ts paid by plan assets and by separate assets (687) (559) - - (687) (559) Benefi ts directly paid by the employer (334) (299) (36) (41) (370) (340)
Defi ned pension and other benefi ts expense (Service Cost + Net Interest Cost/
Benefi ts directly paid by the employer 334 299 36 41 370 340
Weighted average fair value per option at grant date (in Euro) (b) (c) 1.42 1.88 1.36 1.81
with a discount. The leverage on the employees’ personal investment is in the form of a loan (non-recourse) from a third party bank. The shares are restricted from sale during a period of 5 years (except specifi c early exit cases allowed by applicable laws). Employees who participate in the leverage plan benefi t from a guarantee on their personal investment and also receive a defi ned percentage of any upside appreciation (above the non-discounted reference price) on the full leveraged amount invested.
The total cost of Performance Shares recognized was €25.7 million as December 31, 2015 (€31.4 million as of
The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share: ■ the calculation of the basic net income per ordinary share assumes no dilution and is based on the weighted average number of outstanding ordinary shares during the period.
IARD Mutuelle 11%. Aggregate written premiums recorded in this coinsurance agreement amounted to €1,654 million in 2015
(AMF) General Regulations, the table below distinguishes the fee amounts paid by AXA to each of the Statutory Auditors in charge of auditing the Group’s fi nancial statements between the fees for the legal mission of Statutory Auditors of the statements, for the diligence directly related to them, and for other services.
“Subsidiary SEC Reports”). The Subsidiary SEC Reports are publicly available and Management encourages readers of the fi nancial statements to consult the Subsidiary SEC Reports for a full description of all the various litigations and related matters in which these subsidiaries are involved. Copies of the Subsidiary
The plaintiffs initially appealed but have voluntarily dismissed that appeal. In January 2016, the Schuster case was dismissed on similar grounds. The O’Donnell case remains pending but, in
NatWest succeeded in having this case dismissed in March 2013 on a summary judgement motion but, during 2014, this was overturned and the case was remanded to the court of fi rst instance. The exposure of AXA CS in this matter, if any, cannot be reasonably estimated at this time and will depend on a variety of factors including (i) the ultimate outcome of the litigation for
However, due to the nature of such lawsuits and investigations and the frequency of large damage awards and regulatory sanctions in certain jurisdictions (particularly the United States)
On February 11, 2016, AXA announced a business initiative to contribute to fi nancial inclusion and better serve the middle class of tomorrow by accelerating the development of its Emerging
retirement on September 1st: (i) Mr. Denis Duverne as Chairman of the Board of Directors, and (ii) Mr. Thomas Buberl as Chief
These consolidated fi nancial statements have been approved by the Board of Directors. Our role is to express an opinion on these consolidated fi nancial statements, based on our audit.
When the number of Board members aged 70 or older exceeds one-third of the directors in offi ce, the oldest director is deemed to have resigned automatically unless any member of the Board of Directors aged 70 or older voluntarily resigns within three months.
Share capital reduction by cancellation of shares (40,313,450) (812,967,057) 2,422,574,491 5,547,695,584 31/12/2015 Exercise of stock options 3,883,751 52,198,740 2,426,458,242 5,556,589,374
Directors and the gender balance on the Board, the conditions of preparation and organization of the Board of Directors’ work
The Board of Directors determines the Company’s business strategy and oversees its implementation. The Board considers all material questions related to the proper functioning of the
Company’s business. The Board of Directors also undertakes all controls and verifi cations as it deems appropriate from time to time.
Group Governance Standards require, among other things, the b oards of AXA’s principal subsidiaries to establish an a udit c ommittee and a c ompensation c ommittee. The a udit c ommittees have a critical role in reviewing fi nancial results and other fi nancial information prepared by the management, fi nancial reporting and control processes, critical accounting policies, particular accounting issues, key risks and systems of internal control, fraud and similar issues.
Executive Committee – Q uarterly B usiness R eviews (“QBR”) – Strategic Plan
Committee conducts QBRs, during which the performance of the main Group business units is reviewed. These QBRs were introduced in 2000 to provide management with a clear and consistent framework for: (1) reviewing operational performance and monitoring the progress of key projects using quantifi able standards of measurement defi ned in collaboration with the
In addition to the Group’s Chief Executive Offi cer and Deputy
Chief Executive Offi cer, who under Solvency II, are considered to be persons who effectively run the Group, the Solvency II
When appropriate, this work leads to the implementation of decisions that affect the Group’s risk profi le, helping to monitor the solvency position and manage the volatility of AXA’s earnings through improved understanding of the risks taken and optimization of capital allocation.
Solvency II regulation, the Group (and each entity) is required to produce an ORSA R eport which is fi led with the regulator. GRM
This internal m anagement c ommittee is co-chaired by the Group
Annual Report relating to risk and other matters; 4. CFO Sign-Off on notes to the Consolidated Financial
Medef Code. However, in order to take into account certain specifi cities of its business and governance practices, AXA has decided to adapt in certain cases set out below the provisions of the Afep-Medef Code while remaining in line with the principles of the Afep-Medef Code: ■ Section 9.4 of the Afep-Medef Code relates to the independence of parent company directors holding a directorship in a Group subsidiary: the Company considers the fact that certain members of the AXA Board of Directors hold a non-executive directorship in one or more Group subsidiaries wholly owned, directly or indirectly, by AXA does not automatically (i) place them in a situation of confl ict of interest, or (ii) impair their independence in any way. The Board believes that permitting its members to sit on the b oards of certain Group subsidiaries is benefi cial to the Board’s overall knowledge and appreciation of the Group’s operations, strategy and risk profi le. Directors who also serve on the bo ards of Group subsidiaries, however, are required to abstain from participating in the decisions of the AXA Board which could affect the interests of the entity in which they hold a directorship to prevent potential independence issues; ■ Section 16.2.1 of the Afep-Medef Code relates to the review of the accounts by the Audit Committee: for practical reasons, the review of the accounts by the Audit Committee generally occurs on the day preceding the Board of Directors’ review, and not two days before as it is recommended by the Afep-
3,014,469 stock options have been granted, each of which gives the holder a right to acquire an AXA share (either newly issued or existing) at a specifi ed strike price.
Net financial expenses, which include interest expenses net of interest incomes from loans and investments, stood at €948 million versus €1,102 million in 2014. This €154 million improvement is mainly explained by €131 million gain on interest rate hedging strategy.
III. NET INCOME FOR THE FINANCIAL YEAR VI + VII +VIII 1,747 2,392
Since January 1, 2011, AXA has applied the hedge accounting rules to hedge foreign exchange risk applicable to investments in subsidiaries and affi liates (regulation ANC n°2015-05).
In accordance to regulation CRC 2008-15, repealed and replaced by regulation ANC n°2014-03 chapter “titre VI, chapitre
Mutuelles AXA, and €36 million relating to the capitalization of software costs.
(b) The net increase of €513 million was primarily attributable to a loan granted to AXA UK Plc for £350 million (€477 million).
Middle East (vs. 20.1% in 2014), 14.2% in the Americas (vs.
Following AXA’s vision to create a virtual global learning offer to provide employees with the ability to access knowledge anywhere, at any time, and on any device, the majority of learning programs are now managed in the “Global Learning
T hroughout 2015, AXA continued deploying its employer brand through global campaigns on LinkedIn and other social media, aiming to support the recruitment efforts of AXA’s local entities.
The objective is to develop the “pride of belonging” to AXA
Number of employees with disabilities – concerns entities operating in France only 752 emp. 857 emp.
Compensation cost of salaried workforce (c) 8,610 M€ +10.1% (c) 7,818 M€
■ Proportion of variable pay (related to wages) 16.6 % 16.9 %
■ Proportion of fi xed pay (related to wages) 45.6 % 47.2 %
With regards to Grenelle 2 legislation, AXA Group emphasizes that its direct operations, focusing on fi nancial services, do not generate major impacts on the environment. AXA has some sites classifi ed for environmental protection but they do not produce any signifi cant emissions into air, water and soil, CO
of fl oor space), fuel/steam (7% of fl oor space) and chilled water
AXA believes it can also inform public policies on the importance of tackling and adapting to climate change. Recent examples of this approach include: ■ AXA was named Vice-Chair of the FSB Task Force on Climaterelated Financial Disclosures. The TCFD will develop voluntary, consistent climate-related fi nancial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective fi nancial disclosures across industries. The work and recommendations of the Task
(h) This data has been collected from 84,380 FTEs. Some sites in Asia and America are not equipped with water meters, which prevents accurate measurement and excludes them from the reporting scope before extrapolation. However, entities are starting to better track their water consumption with the installation of water meters (e.g. data centers, AXA Ireland).
October 2013 with the introduction of an airtime-based insurance service sold in collaboration with the mobile network operator MTN Nigeria. In addition, AXA Mansard distributes microinsurance products through partnerships with Microfi nance institutions (MFIs); ■ Mexico: AXA partnered in 2015 with Orifl amme, a cosmetics company, to insure 110,000 self-employed women distributing the Company’s products. Coverage includes accidental death, medical reimbursements linked to accidents and medical assistance.
The Group’s Responsible Investment Committee (RIC), chaired by the Group Chief Investment Offi cer, develops and monitors
■ Company organization to take into account environmental issues; ■ Measures to prevent, recycle and eliminate waste, including indicators unsorted waste, sorted paper for recycling and percentage of cartridges and/or toners for recycling; ■ Water consumption and supply according to local constraints, including indicator water consumption per person; ■ Raw materials consumption and measures taken to improve the effi ciency of their use, including indicators offi ce paper, marketing and distribution consumption and percentage of paper recycled and/or guaranteeing sustainable management; ■ Energy consumption and measures taken to improve energetic effi ciency and the use of renewable energy, including indicators consumption of electricity, gas, fuel, steam and chilled water and energy consumption per person; ■ Greenhouse effect gas emissions, including indicator CO