2004 Half Year Results Presentation

In attendance:

• Henri de Castries, Chairman and CEO of the AXA Group.
• Claude Brunet, Member of the Management Board, Head of transversal activities, communication and Human Resources.
• François Pierson, Member of the Management Board, CEO of AXA France, head of large risks and assistance operations and AXA Canada.
• Denis Duverne, member of the Management Board, Head of Finance, Control and Strategy.

I. Harvesting the fruits of our strategy

1. General remarks

Henri de Castries

Our operating environment in the first half of the year was fairly erratic. Indeed, while the change in the loss ratio benefited our property and casualty operations, the environment for the life and the asset management segments was mixed. This is primarily explained by the distressed equity market. Interest rates, however, were up, which was positive for us.

2. Principal results

a. Revenues

Against this backdrop, the AXA Group's results were very strong.

Revenues were up 2.4% at constant exchange rates. Expressed on a current euro basis, this change is virtually flat, reflecting the continued negative impact of the depreciation of the US dollar against the euro. Nevertheless, it is important, in the long-term, to consider Group's growth at constant exchange rates.

Growth was considerably more significant in property and casualty than in the life and savings segment. As you noticed, growth in property and casualty operations improved significantly, accompanied by gains in market share and profitability. We believe that we can further improve the results of life insurance operations in the second half of the year. Nonetheless, it is important to underscore that the margins are significantly higher, as we will explain.

b. Earnings

Underlying earnings increased significantly by 37% at constant exchange rates, with improvements in all of the Group's activities.

Adjusted earnings and net income improved considerably compared with the prior period, increasing respectively by 355% and 621% at constant exchange rates.

These changes are due to the impairment valuation allowances on equity securities which were recognize last year and which we did not need to re-provision this year due to market stabilization in first half 2004. We still, nevertheless recognize allowances, but which were significantly less than the capital gains generated by our portfolio management. We are gradually returning to a normal situation in terms of profitability.

c. Productivity

Key performance indicators, which provide an idea of the quality of earnings in this area, are very strong. New life business contribution, for instance, was up 21% at constant exchange rates. With consolidated revenues for the segment up 1.6%, the increase of 21% attests to a significant improvement in margins.

The margin on new business improved by 2.1 points over the prior period.

Finally, the property and casualty combined ratio improved by 2.3 points over the corresponding prior period to 99.4%. As a reminder, our objective is to maintain the ratio within the target range of 98% - 102%. In addition, we continue to enjoy a more comfortable level of reserves than the level at the close of the prior period.

d. Change over several periods

Since 2001 - or the beginning of the crisis - we have managed to increase our half-year earnings by an average 18% a year. Our operational model is particularly efficient. This improvement also confirms that we are less exposed to the distressed market environment, compared with what some outside observers think.

3. Geographic diversification

The AXA Group is recognized for its core business, which it exercises in different geographic regions where it holds significant market share. Our Group's risk profile is particularly strong, as is demonstrated by the turnaround in results of companies that we have recently acquired, especially in Japan, the United Kingdom, Germany and Belgium.

This significant acceleration in operations is the fruit of efforts undertaken over the last years. In addition, the performance of major traditional contributors remains strong, despite the fall in the equity market which began in 2000. For AXA France, for example, first-half 2004 earnings are better than the results reported for the full-year 2000, or 411 million euros, compared with 325 million euros.

With respect to our risk profile, as a reminder, in 2000, three countries represented 78% earnings: France, Belgium and the United States. Today 13 countries generate 78% of the Group's earnings. This diversification means that our risk profile is much better than it was three or four years ago. In brief, we are now reaping the fruits of the strategy that we have applied continuously over the years.

4. The Group's principles

The Group's operations are based on three core principles. The first is the geographic diversification of our single core business. The two other principles are critical size and Group leverage.

Several companies chose to branch out beyond their core business to achieve diversification. On the contrary, we chose not to change core businesses, but to use geography as an element of diversification.

We need to attain the critical size in the markets to distinguish ourselves from our industry peers in terms of unit costs.

With respect to Group leverage, we want to capitalize on the Group's capabilities and structure it to obtain additional productivity with regard to our local, more isolated competitors.

These three elements are effective in the sense that they enable us to avoid over-reliance on any one activity; to take advantage of our increased ability to absorb major shocks; and to benefit from the pooling of Group resources and practices.

5. Profitable growth

In Life and Savings, unit-linked sales were up 19% at constant exchange rates.

In property and casualty, we find ourselves in a virtuous circle, which is illustrated by portfolio and earnings growth. In other words, we brought in profitable new business, attesting to the effectiveness of our operating model.

We have also further reduced our general expenses and have improved our ability to lower unit costs. Consequently, costs ratios have come down, and combined with the increase in revenues, confirms that our margins are increasing.

6. The AXA Model

Our model is based first and foremost on the solid companies at the local level, for which the operational model is effective. These companies fuel external growth, since their effectiveness enables us to acquire other companies in the same markets.

Consequently, our model is based on external and organic growth, a focus on a single core business and geographic diversification.

Our decision to acquire MONY and the proposal to buy out minority interests in AXA Asia Pacific Holdings (AXA APH) fully align with this model.

The AXA APH transaction would first and foremost strengthen the Group's position in Asia to take advantage of growth in the region and to seize external growth opportunities that arise. It would also strengthen the Group's diversification, while enhancing its earnings and simplifying its structure. Finally, AXA would be able to maximize synergies by fully integrating the company.

The transaction amounts to 1.8 billion euros, of which 50% will be paid in cash and 50% in AXA shares. The proposal is subject to a number of conditions, including the approval of the Board of Directors and to minority shareholders in AXA APH, and required regulatory approvals, and other usual terms and conditions applicable to these transactions.

II. Consolidated earnings

1. Revenues (growth rates are presented on a comparable basis)

Denis Duverne

As a reminder, our priority is to deliver profitable revenue growth. In the first half of 2004, the increase amounted to 2.4% over the first half of 2003.

This growth primarily is due to the significant increase from asset management (or 19.1%), fueled by the recovery in the equity markets and positive net inflows.

Property and Casualty operations grew by 4.2%, reflecting positive net inflows in individual motor insurance and successful targeted strategies in commercial lines.

Growth was more moderate in the life insurance segment, which increased by 1.6%, but premiums from unit-linked contracts increased by 19%, representing 35% of total Life and Savings premiums.

In addition, new life business contribution was up 20.9% at constant exchange rates.

2. Earnings by business segment

First half results, presented at constant exchange rates are as follows:

• Life and savings: 848 million euros, an increase of 31%
• Property and casualty: 562 million euros, up 40%
• International insurance: 141 million, up 184%
• Asset management: 136 million euros, an increase of 38%.

For other financial services and holdings, the increase was a loss of 252 million euros, due to exceptional operations that were recorded in 2003.

Overall, underlying earnings were up 37%.

This trend is further accentuated for adjusted earnings, which increased by 355%, reflecting net capital gains of 154 million euros in the first half of 2004, compared with a loss of 722 million euros in 2003. This difference is explained by the significant amount of impairment valuation allowances on equity securities recorded in the first half of 2003. Net income increased by 621%. Exceptional operations recorded in the calculation result primarily from the change in the Group's scope.

a. Life and savings

The increase in life and savings operations is observed in all countries. It is especially significant in Japan, which is a good sign of a recovery in the country. This is due to a recovery in the financial markets and the strengthened management team, which was able to meet the objectives defined.

Improvement was also significant in the United Kingdom, even though results still fell short of the targeted objectives.

This result can also be considered with respect to the indicator life new businesses contribution, which increased from 14.3% in the first half of 2003 to 16.4% in the first half of 2004. France reported the most significant increase, up from 8.4% to 14.1%. In France, the sale of unit-linked products was up significantly and the margin is considerably higher for these products.

While the picture in the United Kingdom is not quite spectacular, the margin increased from virtually 0 to 4%.

In the United States, revenues were down, but we managed nevertheless to slightly increase the margin, which is explained by the sharp increase in the sale of life insurance products.

b. Property and casualty

The most salient indicator of recovery in property and casualty operations is the combined ratio, which improved by 2.3 points to 99.4%, marking the first time the ratio has fallen below the 100% threshold.

This confirms the objective that we set at the beginning of the year to maintain the ratio between 98% and 102%, depending on the changes in the cycle.

The combined ratio is close to 100% in most countries. France has a ratio of 99.9%, which is even more impressive considering the long duration businesses, such as construction.

Moreover, we were able to improve the combined ratio without sacrificing the conservatism of or reserving methodologies.

c. International insurance

The good first-half 2004 results confirm the turnaround and underwriting improvements that we have made, but it should also be mentioned that we benefited from a favorable claims environment. The only major claim was the accident at the terminal at Charles de Gaulle Airport in France.

Underwriting remained highly selective. We also took advantage of expense reductions and we were able to save on reinsurance protections.

For AXA RE, the combined ratio improved from 105.2% to 95%, which was naturally very positive. The loss ratio improved considerably, from 92.1% to 76.9%. However, the general expense ratio weakened - as cost savings were partly offset by restructuring plan costs - while net earned premiums were down 41%.

For AXA Corporate Solutions Assurance, general expenses were down 4% due to lower costs and commission rates, while gross earned premiums were up 14%.

d.  Asset management

Asset management revenues increased by 19%. In addition, the Group continued its expense control efforts.

Assets under management increased in terms of average AUM (up from 646 billion euros at year-end 2003 to 696 billion euros) and in terms of ending AUM (712 billion euros at June 30, 2004, versus 648 billion for the corresponding prior period).

III.MONY

AXA completed the acquisition on July 8. The sales forces of AXA Financial and MONY are trained in complementary product offerings:

· MONY advisors are being trained on AXA Financial's Variable Annuity product offering

· AXA Advisors financial professionals are being trained on MONY's "Special Risks" products.

We are now also reaping the benefits of MONY Partners, which wholesales life and annuity products. Early indications are promising, with quotes increasing 77% over the two weeks prior to the closing of the transactions to the two weeks subsequent to the closing. MONY Partners should further benefit from AXA Financial's ratings and products.

Consolidation and integration are already in progress, with major cost synergies anticipated (headquarters consolidation, back office and sales force consolidation and rationalization, IT systems integration, and migrating AXA Financial's culture of efficiency and discipline to MONY).

Synergies should lead to annualized pre-tax operating expense savings of 175 million dollars in 2005. Further, additional 2005 underlying earnings resulting from the MONY acquisition are estimated at 170-195 million dollars (after tax) under French GAAP.

IV. Outlook

Henri de Castries

Going forward, we expect our property and casualty and international insurance operations to extract additional productivity gains.

Further, growth in life and savings and asset management operations should accelerate, owing to economic recovery and country-specific factors. Indeed, the United States will take advantage of MONY's additional distribution power. The results for the Asia-Pacific region should be boosted by economic growth in the region, while efforts to turn around operations in Japan and the United Kingdom should start to bear fruit.

Three or four years ago, AXA was recognized as having a track record for acquiring weak companies at an attractive price. Our challenge was to prove our ability to continue to turn around the acquired companies and increase our business margins.

Today, we have built a solid financial protection platform. Further, we have also shown our ability to turn around the profitability of companies we acquired four or five years ago. We are also able to accelerate growth in our operations, as well as complete external transactions under reasonable financial conditions.

Further, we can significantly improve our operating model. Our model has numerous strengths: we have a well-defined core business - financial protection - a unique platform in terms of diversification, and we will continue to strive for operational excellence.

We intend to leverage this model to strengthen our organic growth, continue to lower our unit costs and to take advantage of external growth opportunities when they arise.

Questions from the floor

Some of your industry peers in the property and casualty segment, especially in the United States, are starting to express their concerns about deteriorating conditions and a decrease in prices in several lines? What is your assessment?

Henri de Castries

We are not exposed to the US property and casualty market. Consequently, we are not impacted by the decrease in prices in any given line. The issue of cycle is more of a concern for us in Europe -where we exercise the bulk of our property and casualty operations.

In this region, I believe that we are in a favorable phase of the cycle, but we still have to show that we have crossed the turning point. I believe that the market is more selective at top end. In other words, we will have to face more intense competition for the bigger and better risks. This is not an obstacle for us, especially considering the growth that we generated in the French market and which proved that we were fully capable of gaining profitable market share.

Like companies in the industrial sector, we will be able increase our edge over our peers and in the environment by being more proactive with respect to costs.

François Pierson

The figures presented earlier for new business and premiums for the individual segment confirm that our prices are adequate. This is due to our large client base. We are also able to offer the appropriate price for the right client, with attractive rates compared with the market.

We have a dynamic sales policy in the individual segment, our prices did not, on average, decrease significantly in the first half of 2004.

Moreover, in commercial lines, prices can be reduced in the property and casualty segment but not in other lines. Admittedly, it is more difficult to obtain increases in premiums compared with 2002 and 2003. Having said that, however, I'm not sure that we are at the end of the cycle.

Denis Duverne

With respect to the situation in Europe, in the 1990s, property and casualty insurers invested significantly in equities. The capital gains on shares offset high combined ratios. Then, two things happened, the capital gains on shares disappeared and were replaced by impairments, and the proportion of shares was reduced significantly.

We are among the European players that have least reduced our exposure to equities. Today, the equity markets are rather stable. Our peers have thus not found an alternative for generating sufficient gains that would make it possible to offset their combined ratios. This attenuates the importance of the property and casualty cycle. Moreover, since they have reduced their exposure to equities, the situation appears to be long-term.

In addition, several actors have exited the market. Insurance companies have changed management, and management has decided to be more rational in terms of prices.

Further, in commercial lines, exclusions and policy terms and conditions are much more strict. This hardening is long-lasting.

Lastly, the decrease in price was less significant than anticipated. We continue to benefit from a favorable environment, and we are not pessimistic about the change in the cycle in property and casualty insurance.

Earlier, you mentioned the accident at the terminal at Charles De Gaulle Airport in France. What is your assessment of the loss?

François Pierson

Losses should not exceed more than 10 million euros. In addition, the loss was factored into the AXA Corporate Solutions combined ratio, which, as you have seen, is less than 100%.

According to the figures that you advanced for net income, it seems that with the exception of holdings, operations in Germany are still a net loss. When will the initiatives taken a year ago start to be effective?

Henri de Castries

In Germany, underlying earnings in property and casualty insurance increased significantly. The capital losses generated in the first half of the year had no impact on the financial structure (transformation of unrealized capital losses into realized losses). The operational picture is improving gradually.

It looks like the rules of the game have changed slightly in China, since the Government is now encouraging asset managers to go international. How would you assess this change?

Henri de Castries

In our business, China is seen as a high-growth market, but only in the future. State-owned Chinese companies still hold more than 90% of the market. Although increasing, the market share of foreign players remains limited.

The fact that players are now able to invest in a growing number of asset classes is beneficial, since this improves risk diversification. Nevertheless, the pace of development of operations has not changed.

Moreover, I believe that the ability of Chinese companies to operate in markets outside China is a long-term initiative. Many players already operate in the US and in European markets, in which the competition from local players is intense.

What is the status of the cost reduction plan? Also, in line with the buyout of minority interests, how generous were you?

Henri de Castries

As we indicated earlier, we have cut costs by more than 1 billion euros. At the end of fiscal 2003, he had cut costs by some 13% and increased revenues by 13%. In line with our objectives, the expense reduction for the first half of 2004 is less significant. Today, we intend to be more flexible. Indeed, we are more attentive to reducing unit costs than to reducing absolute costs, since this will enable us to improve our margins, and by extension, the Group's overall profitability.

In respect of the buyout of Australian minority interests, we are prepared to offer 3.75 Australian dollars per share, representing a premium of 15% versus the share price over the last three months. The objective is to have an equitable price level.

I'd like to thank you all for being here.