AXA SA’s shares dropped sharply, marking their biggest single-day fall since early April, after the French insurer reported a profit that missed expectations and revealed plans to buy a majority stake in Italian car insurer Prima Assicurazioni. The stock slid as much as 7% following news that AXA’s first-half net income fell 2.4% to €3.92 billion, well below the €4.68 billion forecast by analysts.
The earnings results also showed an 8% shortfall in headline earnings and a 9% miss on equity, according to KBW analyst William Hawkins. This came after AXA’s CEO Thomas Buberl said the company is focused on strengthening its core insurance business. Earlier this year, AXA sold its asset management division as part of a strategy to sharpen its focus.
Part of this strategy involves a new investment in Prima Assicurazioni, an Italian car insurer known for its direct distribution model. AXA announced it will acquire a 51% stake in Prima for about €500 million ($572 million). Buberl emphasized plans to keep looking for acquisitions as the insurance industry continues to consolidate, with the goal of growing in size.
Prima, based in Milan and founded in 2015, offers car insurance primarily in Italy but has expanded to the UK and Spain since 2022. The company now serves over 4 million customers across Europe. It is backed by major investors including Blackstone, Goldman Sachs, and Carlyle Group, which have held stakes since 2018 and 2022.
The deal includes put options linked to Prima’s earnings for both AXA and minority shareholders, covering the remaining 49% ownership. It is expected to close by the end of the year. While some analysts, like Philip Kett from Jefferies, consider the deal fairly valued, they do not see it as particularly compelling.
AXA’s move reflects a broader trend toward consolidation in insurance, aiming to build scale and enhance competitive strength in a changing market. The company appears determined to adjust its portfolio and increase direct customer relationships as it moves forward.