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Axa latest to cut dividend


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PARIS, France (Reuters) -- Axa, France's largest insurer, on Thursday posted an 82-percent rise in 2002 profit after securities writedowns and one-time costs, helped by strong property casualty premium rates and cost-cutting efforts.

But Axa also sliced its dividend, saying it would propose an annual dividend of 0.34 euros versus 0.56 euros a share in the year-earlier period. It said it would continue to cut costs this year and it appointed two people to its management board.

The Paris-based insurer earned 949 million euros after writedowns and one-time items in 2002, compared with 520 million euros in net profit in 2001. Axa had taken a 561-million euro hit in 2001 for losses related to the World Trade Center attack.

Axa and other insurers have raised nonlife premium rates in the face of increased risk of terror attacks and economic malaise, as well as to offset growing investment portfolio losses in the prolonged stock market downturn.

Investment writedowns cost Axa 614 million euros last year compared with 636 million euros in 2001. The toll of portfolio writedowns on the balance sheet has made some investors cautious.

Axa might do a rights offering to raise capital but analysts have said the company's capital base is still in good shape.

Excluding writedowns and other one-time items, Axa earned 1.687 billion euros in 2002 compared with 1.533 billion in 2001.

Analysts polled by Reuters expected Axa to earn between 146 million euros to 1.13 billion euros after writedowns last year, with an average estimate of 795.1 million euros. The range was wide because of the difficulty of forecasting the amount of writedowns Axa would take in its investment portfolio.

On an operating basis, excluding writedowns, analysts had forecast Axa would earn from 1.53 billion euros to 1.77 billion euros last year, with an average estimate of 1.64 billion euros.

Axa also backed a combined ratio target of 104 percent for its property and casualty operation for this year and set a target of 102 percent for 2005, barring any major catastrophic losses. It said it would continue to cut costs too.

Axa shares closed at 10.29 euros a share in Paris on Wednesday. Axa stock fell about 46 percent last year, just outperforming a 51 percent drop in the DJ Stoxx European insurance stock index .



Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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