AXA S.A.

The stable outlook on AXA reflects our view that, over the next two years, AXA will continue to expand its underlying profits, maintain a return on equity (ROE) of about 15%, and recover its capital adequacy to very strong levels, according to our capital model, by 2025. We could lower the ratings over the next two years if unexpected adverse market developments materially reduce AXA's profitability, or if more aggressive capital management leads us to doubt AXA's capacity to restore capital adequacy to a very strong level by 2025. We are unlikely to upgrade AXA. We could raise our ratings if we determine that its prospective capital adequacy buffers would materially strengthen within a very strong range, and if the

...AXA Group (AXA) will maintain its extremely strong competitive position in core markets. AXA is one of the largest global multiline insurers (GMI), distinguished by its diverse geographical footprint and product lines. Business and earnings diversification remains a key differentiator for AXA compared to other GMIs. We believe that AXA's profile is most similar to that of GMI peers Allianz and Zurich. AXA's strong financial risk profile reflects its robust capital generation with some reliance on soft forms of capital. We expect AXA to recover its very strong capitalization by 2025 after a dip in 2022, after lower bond values led to a sharp drop in equity. Despite its high capital generation, AXA has increased shareholder payouts via dividends and share buybacks, which will slow the pace of capital build-up in 2023-2025. We also consider that AXA's partial reliance on soft forms of capital, such as VIF and hybrid debt, increases the volatility of its capitalization in times of market stress....

Full Report