What is AXA Liability Managers' core business?
Operating in 6 countries, located in Continental Europe, the US and the UK, AXA LM's expertise lies in the acquisition and management of non-life (re)insurance legacy business. In other words, we work to reduce exposures and create value out of the "run-off" portfolios we've acquired and are managing. When an insurance or reinsurance company puts a portfolio into run-off, it stops underwriting a specific line of insurance or reinsurance business. It generally makes this move when the company decides, after a strategic review, to focus on core activities or to exit business segments with low profitability or low growth.
AXA LM's business consists of bringing liabilities to a close as quickly as possible (finality phase). We manage both run-off portfolios of the AXA Group and liabilities acquired through the AXA DBIO (Discontinued Business Investment Opportunities) fund launched in 2012 to leverage capital for the acquisition of new portfolios.
What is your ambition for 2015?
On April 16, 2015, we announced the acquisition of a pool specializing in aviation reinsurance risks: the GERA pool. This transaction, in which AXA LM acquired the shares of the existing 25 pool members, - the eleventh acquisition conducted through our AXA DBIO investment vehicle - sends an excellent signal and has helped to strengthen our positioning in the run-off market. We are already very well positioned, especially in Continental Europe, where we have made a number of significant acquisitions in past years.
Our environment is a very competitive one: we operate in a niche market with a high variety of players (from big firms such as Swiss Re and Fairfax to smaller professionals like Enstar and Catalina) whose number will grow in the short term as Solvency II's new capital requirements lead to run-off divestments. As acquirers, that means more opportunities for us.
In this context, our ambition is to create value for our shareholders. We can honestly say our strategy has delivered excellent results. We outperformed most of our financial targets for 2014 and contributed €39 m to Group's underlying earnings. Our successful acquisitions have permitted the payment of a first dividend of €26.5 m.
Considering these encouraging results and how the market is evolving, we will actively pursue new acquisitions in the future, in line with our development strategy.