Moody’s Ratings, a provider of credit ratings, research, and risk analysis, announced that it has upgraded the insurance financial strength rating of AXA SA to Aa2 from Aa3.
According to Moody’s, all of AXA’s debt ratings were also raised by one notch as part of the review, with upgrades applied across junior subordinated debt, senior unsecured debt, and preferred stock.
The group’s commercial paper rating was affirmed at P-1. Moody’s noted that ratings of AXA’s European operating subsidiaries and of XL Bermuda Ltd were lifted to Aa2 as well, also with a stable outlook, reflecting the strength of their businesses and the likelihood of ongoing support from the parent company.
In its announcement, Moody’s highlighted that AXA’s stronger credit profile is underpinned by structural improvements in earnings and capital adequacy.
The agency pointed to AXA’s Solvency II ratio of 220% as of the second quarter of 2025, which has been broadly consistent with the group’s levels since 2021.
Moody’s emphasised that AXA’s shift away from life underwriting and reduced exposure to market risk have enhanced its capital resilience, while strong internal capital generation continues to support its balance sheet despite significant shareholder distributions through dividends and share buybacks.
Moody’s further explained that AXA’s profitability has strengthened meaningfully, with returns on capital reaching approximately 9 percent in both 2023 and 2024, compared with an average of 6% between 2019 and 2022.
Earnings have become more stable, with the property and casualty segment now accounting for around two-thirds of underlying profits and life and health continuing to provide steady contributions. Moody’s added that a lower reliance on investment-related income has made earnings quality more durable over time.
The agency also observed that AXA’s exposure to French sovereign risk is moderate, as domestic government bonds account for only about 5% of invested assets and French operations represent around 24% of group earnings. This limited concentration, Moody’s said, supports AXA’s resilience to potential volatility in its home market.
Moody’s concluded that the outlook for both AXA and its core operating entities is stable, reflecting its expectation that the group will preserve the strength of its business model, sustain profitability at current levels, and maintain solid capital adequacy.
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