Axa SA is considering options for its Middle Eastern operations including a potential sale, as Chief Executive Officer Thomas Buberl continues to streamline the operations of Europe’s second-largest insurer, people familiar with the matter said.
The French insurer is working with HSBC Holdings Plc on the strategic review, according to the people. Axa hasn’t yet kicked off a formal sale process, the people said, asking not to be identified because the process is private.
Axa has been pivoting away from capital-heavy life insurance and selling less profitable businesses across the globe. The company is also seeking a buyer for its operations in central and eastern Europe, according to people with knowledge of the matter.
Paris-based Axa bought XL Group Ltd. for about $15 billion in 2018, boosting its focus on commercial and non-life insurance through its biggest-ever acquisition. It also raised $3.2 billion through an initial public offering of its American unit, now known as Equitable Holdings Inc.
Shares of Axa have risen 21% over the past 12 months, giving the insurer a market value of about 59.2 billion euros ($65.6 billion).
No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said. Representatives for Axa and HSBC declined to comment.
Axa offers life insurance and property and casualty insurance in a number of Middle Eastern countries including Lebanon. It also has operations in Saudi Arabia, the United Arab Emirates, Bahrain, Qatar and Oman.
The operations fall under Axa’s International division, which generated gross written premiums of 3.45 billion euros in the first half of last year. The International division reported 232 million euros of net income during the six months through June, or about 10% of the group’s overall total.
Revenue from the Gulf region declined during the period, as a client reduced the size of a large commercial motor fleet, according to its results announcement.
(Updates with details from financial results in penultimate paragraph)
–With assistance from Geraldine Amiel and Harry Wilson.