French insurance giant Axa said Thursday that its bottom-line earnings took a hit in the first six months from customer claims arising due to the coronavirus pandemic.
Axa said in a statement that it net profit tumbled by 39 percent to 1.4 billion euros ($1.7 billion) in the period from January to June on a two-percent decline in revenues to 52.4 billion euros.
“Strong growth in the first quarter (was) offset by lower business activity in the second quarter,” explained chief executive Thomas Buberl.
“In the first half of 2020, Axa demonstrated its resilience in the challenging context of the COVID-19 pandemic,” Buberl said.
“The impact of COVID-19 on Axa’s earnings was in line with our previously published guidance.”
Axa reiterated its estimate for 1.5 billion euros in pandemic-related claims for the whole of 2020.
In addition, earnings were hit by the decline in the value of its share portfolio as a result of the severe turbulence on global stock markets.
Against this backdrop, Axa said it had withdrawn its full-year targets for underlying earnings per share and adjusted return on equity.
In addition, the insurer said that on the recommendation of both French and European regulators to refrain from dividend payments until January 1, 2021, its board of directors had decided not to the issue the remaining payouts due to shareholders with regard to the 2019 dividend.
