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, keep a combined ratio of 95% or below and a return on equity (ROE) above 10%, and maintain its capital adequacy at least at the 99.80% level, according to our capital model. We could lower the ratings over the next two years if unexpected adverse market developments materially reduced AXA's capital adequacy, or if a materially and consistent weakening of AXA's operating performance, combined with its ratchet dividend policy, would lead to a materially negative internal capital generation. Although unlikely over the next two years, we could raise our ratings if we determined that AXA's capital adequacy buffers

...AXA Group (AXA) will maintain its extremely strong competitive position in core markets. AXA is one of the largest global multiline insurers (GMIs), distinguished by its diverse geographical footprint and product lines. Business and earnings diversification continues to set AXA apart from other GMIs. We believe AXA's profile most resembles that of GMI peers Allianz and Zurich. AXA's strong financial risk profile reflects its robust capital generation, with some reliance on future profitability in the form of the CSM. The enhancement in transparency under International Financial Reporting Standards (IFRS) 17 benefited our view of AXA's capital adequacy at the 99.80% confidence level, as per our revised capital model. As a global player, AXA is highly diversified, which reduces the required capital charges substantially, as per our criteria. However, despite its considerable capital generation, AXA increased shareholder payouts via dividends and share buybacks, which could reduce the pace...

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