AXA Gets a Boost: Insurer Profits to Rise into Industry Pricing Cycle

	Profit-
Stock	Sept-Nov	Sept-Nov	Sept-Nov	Sept-Nov	Sept-Nov	Sept-Nov	Sept-Nov
	(of 5)	2004	2005	2006	2007	2008	Average
AXA	4	14.07%	12.55%	2.04%	1.65%	-40.74%	-2.09%

Symbol	AXA
Trade	24.98
Volume	558,750
Avg Vol (3m)	457,732
P/E	N/A
Market Cap	51.49B
PEG Ratio	0.13
P/B	N/A
Pct from Yr High	-30.61%
Pct from 200d MA	43.86%
Short Ratio	0.6
EPS Est (next yr)	2.66
EPS Est (current yr)	2.15
Pct from 50d MA	12.04%

Insurance pricing power returns through recovery phase as coverage increases and demand for variable annuities increases.

1^st half ‘09 P&C sales were 34% of total sales, while 4% came from asset management and 62% was L&S.

AXA has 80mn clients, mostly retail. North America accounts for 14% of sales, 25% is France and 10% is Asia. Sales are split evenly between proprietary and non-proprietary distribution.

AUM is stabilizing thanks to global market strength, adding upside to AllianceBernstein. Adjusted Earnings and Net Income improved from the 2^nd half of ‘08.

In the U.S. market, the company is redesigning its VA products to drive further margin growth. Underlying earnings rose to 2.1bn Euros from 1.27bn Euros in the prior 6 months ending ‘08; thanks in part to US VA margins. Adjusted earnings are benefiting from narrowing spreads. YoY revenue was –1.8% (-5.7% comparable basis).

AXA’s 37.7 bn euro outflow, mainly at AllianceBernstein, is likely to reverse with improving markets and re-allocation to risk (AUM fell –1.5% from FY08). Life and Savings inflows rose 5.6bn Euros. AXA’s Europe motor premium repricing adds upside.

Disclosure: Long AXA