Europe’s second-biggest insurance company posted disappointing earnings for the first six months of 2012 but the company’s growth prospects were stable , Henri de Castries, chief executive and chairman of AXA, told CNBC.
After posting a 36 percent drop in profits to 2.59 billion euros ($3.15 billion) from 4.01 billion euros in the same period a year ago. De Castries said AXA’s performance was stable against a backdrop of economic volatility in Europe, despite the company’s shares being 3.4 percent down this year, bucking the trend across the general European insurance sector which has risen 8 percent.
“We think it’s a solid set of earnings because in an environment that is much more difficult than it was last year, our revenues are growing, and if you leave aside the exceptionals, the earnings are stable.”
De Castries added that revenues were growing in certain sectors such as property, casualty and health and protection insurance (up 4 percent) and were stable in others such as life and savings insurance — despite the company only reporting a 1 percent revenue increase in these areas.
After the markets’ lackluster reaction to European Central Bank President Mario Draghi’s promise of a plan in the coming weeks to “save” the single currency, de Castries also told CNBC’s “Squawk Box Europe” that he believed nothing had changed — or could change quickly — in the euro zone.
“It’s not going to be an easy and a quick fix. What the politicians and the [European] central bank have to correct is mistakes which have been made over a generation. It would be naïve to think that this is going to go away in a few weeks or even in a few quarters,” he said.
Though de Castries said that he was positive a cure would come, there could be trouble along the way to a recovery.
"If you take the long-term view, within a few years the European budgets will be better balanced, public spending will be lower and structural spending reforms will have happened.”
“The risk is an accident on the road to a cure," he said.