AXA Equitable to Give Parent Name the Ax -- WSJ
14 Gennaio 2020 - 09:02AM
Dow Jones News
By Leslie Scism and Nicole Friedman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 14, 2020).
AXA Equitable Holdings Inc. is dropping AXA from its name in
another sign the company is breaking free of insurance conglomerate
AXA SA, its parent since the 1990s.
The rebranding follows the initial public offering of AXA
Equitable shares in May 2018 and a secondary offering last year,
which reduced ownership by the French powerhouse to a small
slice.
The 161-year-old New York company is expected to announce its
new name, Equitable Holdings, on Tuesday morning, company
executives said.
Mark Pearson, the U.S. company's chief executive, said in an
interview that the decision to revert to the company's original
name was an easy one.
The company was founded in 1859 as The Equitable Life Assurance
Society of the United States.
"It's got such brand goodwill in there, particularly in the
baby-boomer generation" that remembers the pre-AXA years when
Equitable Cos. was the moniker, he said.
This move highlights the trend of U.S. life-insurance brands
separating from larger insurance corporations due to challenging
market conditions.
Industrywide in the U.S., individual life-insurance-policy sales
have fallen about 45% since the mid-1980s, though sales have
flattened out in recent years, according to Limra, an
industry-funded research firm.
AXA's acquisition of the U.S. company in 1992 was part of a wave
of European purchases of American life insurers, as the European
companies sought to earn fees from baby boomers' retirement
savings.
Since the 2008 global financial crisis, some of those acquirers
are reacting to tougher and sometimes conflicting capital
requirements in Europe and the U.S. for many types of
life-insurance products.
At the same time that they need to hold more capital, ultralow
interest rates are depressing what they can earn by investing
premium dollars.
Paris-based AXA is one of the world's biggest sellers of
property-casualty insurance to businesses around the globe. After
the financial crisis, it began shifting away from
interest-rate-sensitive life insurance toward other types of
insurance in which profits are more dependent on underwriting, AXA
Chief Executive Thomas Buberl said in an October interview.
Taking AXA Equitable public was part of this strategic shift.
Some of the proceeds went toward AXA's acquisition of
property-casualty insurer XL Group Ltd. in 2018 for more than $15
billion, he said.
Another reason for the shift, Mr. Buberl said, is that life
insurance is difficult to sell. "It's much easier to talk to an
entrepreneur about his or her risk situation than to individuals
through a banking channel about his or her death," he said.
At AXA today, "there is little dependency on traditional life
business."
Besides life insurance sold to U.S. households, the
to-be-rebranded Equitable is a large seller of retirement-income
annuities, including to teachers through 403(b) tax-advantaged
savings programs. It has a fleet of about 4,300 financial advisers
and also sells through banks, brokerages and other middlemen.
The company also has a 65% ownership stake in the separately
publicly traded asset manager AllianceBernstein Holding LP.
Equitable's management has pledged substantial dividends and
share buybacks to investors, with any acquisitions unlikely before
next year, Mr. Pearson said.
Mr. Pearson said his team is enthusiastic about competing
against U.S. rivals as an independent company.
"The phrase I use internally: We here in the U.S., get to build
the house we want to live in. Before, we were living in AXA's
house," he said.
Write to Leslie Scism at leslie.scism@wsj.com and Nicole
Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
January 14, 2020 02:47 ET (07:47 GMT)
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