NEW
YORK, April 10,
2013 /PRNewswire/ -- AXA today announced it had entered
definitive agreements with Protective Life Corporation
("Protective") to sell MONY Life Insurance Company ("MONY") and to
reinsure an in-force book of life insurance policies written by
MONY's subsidiary MONY Life Insurance Company of America ("MLOA")
primarily prior to 2004. Under the terms of the agreements and
assuming a closing date of October 1,
2013, the total cash consideration will be USD 1.06 billion (or Euro
0.82 billion). This consideration corresponds to implied
2012 multiples of 12x IFRS underlying earnings and 1.7x IFRS
TNAV(2).
At closing, Protective has indicated that they plan to retain
all positions associated with MONY's customer service and
administrative platform in Syracuse,
NY, and will assume responsibility for servicing MONY and
in-scope MLOA policies, as well as the servicing agreement with AXA
Business Services. Policyholders under the MONY and MLOA policies
that are subject to the transaction will see no changes in their
terms or the level of service.
"This transaction is in line with AXA's active capital
management strategy and in-force optimization initiatives. It
allows us to generate financial resources from a closed portfolio
and to remain focused on our national distribution structure and
network of more than 5,000 financial professionals and more than
650 distribution firms partnering with us to further accelerate our
profitable growth in our core businesses of financial protection,
employer-sponsored products and retirement savings," said
Mark Pearson, President and Chief
Executive Officer of AXA Financial.
Pearson added, "Protective has a proven history of
successfully managing these types of closed book transactions, and
this, together with their decision to retain the current MONY
policy administration team, means that MONY and MLOA policyholders
will continue to receive high levels of professional
service."
"The best way to create long-term sustainable value for all
stakeholders is to stay focused on businesses that have the right
combination of scale, competitive position, cash generation and
growth prospects, and I am very grateful to our US teams for their
excellent work negotiating this transaction and dedication to
achieving the Ambition AXA objectives," said Henri de
Castries, Chairman and Chief
Executive Officer of AXA. "This transaction allows us to
further grow our US business where we have been achieving good
momentum while freeing up capital invested in closed portfolios to
improve our financial flexibility and enable additional investment
in high growth markets and businesses."
TRANSACTION SUPPORTS AXA'S CAPITAL OPTIMIZATION STRATEGY AND
FURTHER GROWTH IN THE US
In 2004, AXA Financial(3) acquired The MONY Group Inc. and its
subsidiaries, including MONY, MLOA, U.S. Financial Life Insurance
Company and Advest(4) for USD 1.5
billion. The MONY Group Inc. was formed and went public in
1998 as part of the demutualization of the Mutual Life Insurance
Company of New York, a mutual life
insurance company founded in 1842. Subsequent to the acquisition,
most new business was written out of other AXA Financial
subsidiaries and MONY/MLOA were effectively placed in run-off, with
the exception of some new business at MLOA, which is excluded from
the transaction. Since 2005, MONY has generated USD 1.0 billion of cumulated statutory net
income.
AXA is therefore disposing of a run-off mortality book primarily
underwritten before 2004, with USD 10.5
billion (or Euro 8.0 billion)
of statutory liabilities as of end of 2012. The book is
comprised(5) of approximately 560,000 whole life, term life,
Variable Universal Life and Universal Life policies; it also
includes 61,000 annuity contracts and 42,000 Accident & Health
and other policies.
The MLOA legal entity, as well as all the other MONY
subsidiaries and distribution network, are outside the scope of the
transaction. MLOA will continue to be used to write new business
and will retain part of the transaction proceeds to fund its future
growth.
IMPACTS FOR THE AXA GROUP
Full year 2012 IFRS underlying earnings of disposed operations
were ca. Euro 70 million.
Estimated impacts on AXA expected after the closing:
- Exceptional capital loss below Euro 0.1
billion, which will be accounted for in Net Income,
including a reduction in intangible assets of ca. Euro 0.4 billion;
- +3 points on Solvency I ratio, which was 233% at December 31, 2012;
- +4 points on Economic Solvency ratio, which was 206% at
December 31, 2012;
- -1 point on debt gearing, which was 26% at December 31, 2012.
This transaction is subject to customary closing conditions,
including the receipt of regulatory approval, and is expected to
close later this year.
ABOUT AXA FINANCIAL
AXA Financial is one of the premier U.S.
organizations in financial protection and wealth management through
its strong brands:
- AXA Equitable Life Insurance Company
- AXA Advisors, LLC
- AllianceBernstein, L.P
- AXA Distributors, LLC
ABOUT AXA EQUITABLE
In business since 1859, AXA Equitable Life Insurance
Company (NY, NY) is a leading financial protection company and one
of the nation's premier providers of life insurance, annuity, and
financial products and services. The company's products and
services are distributed to individuals and business owners through
its retail distribution channel, AXA Advisors, LLC (member FINRA,
SIPC) and to the financial services market through its wholesale
distribution channel, AXA Distributors, LLC. In 2012, AXA Equitable
generated Annual Premium Equivalent (APE) of Euro 1.2 billion (up 14% vs. 2011) and Life &
Savings Underlying Earnings of Euro 0.5
billion (vs. Euro 0.2 billion
in 2011).
Find AXA Equitable on Facebook and Twitter or visit
our website at http://www.axa-equitable.com/.
ABOUT THE AXA GROUP
The AXA Group is a worldwide leader in insurance and
asset management, with 160,000 employees serving 102 million
clients in 57 countries. In 2012, IFRS revenues amounted to
Euro 90.1 billion and IFRS underlying
earnings to Euro 4.3 billion. AXA had
Euro 1,116 billion in assets under
management as of December 31,
2012.
The AXA ordinary share is listed on compartment A of
Euronext Paris under the ticker symbol CS (ISN FR 0000120628 –
Bloomberg: CS FP – Reuters: AXAF.PA). AXA's American Depository
Share is also quoted on the OTC QX platform under the ticker symbol
AXAHY.
The AXA Group is included in the main international
SRI indexes, such as Dow Jones Sustainability Index (DJSI) and
FTSE4GOOD.
It is a founding member of the UN Environment
Programme's Finance Initiative (UNEP FI) Principles for Sustainable
Insurance and a signatory of the UN Principles for Responsible
Investment.
This press release is available on the AXA Group
website
www.axa.com
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS
CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained herein are forward-looking
statements including, but not limited to, statements that are
predictions of or indicate future events, trends, plans or
objectives. Undue reliance should not be placed on such statements
because, by their nature, they are subject to known and unknown
risks and uncertainties. Please refer to the section "Cautionary
statements" in page 2 of AXA's Document de Reference for the year
ended December 31, 2012, for a
description of certain important factors, risks and uncertainties
that may affect AXA's business. AXA undertakes no obligation to
publicly update or revise any of these forward-looking statements,
whether to reflect new information, future events or circumstances
or otherwise.
(1) EUR 1 = USD 1.29, as of April 5,
2013
(2) IFRS Tangible Net Asset Value = IFRS shareholders' equity +
off balance sheet net unrealized capital gains and losses – net
intangible assets
(3) AXA Financial is a holding company for AXA US Life &
Savings and Asset Management activities
(4) In 2005, AXA sold MONY's brokerage subsidiary Advest to
Merrill Lynch for USD 0.4 billion
(5) As of December 31,
2011
SOURCE AXA Financial; AXA; AXA Equitable