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1、 Solvency and Financial Condition Report 2022 AXA SA AXA SA SFCR 2022_va AXA SA Solvency and Financial Condition Report 2022 2 AXA SA SFCR 2022 SUMMARY.7 A.BUSINESS AND PERFORMANCE.11 A.1 Business.12/General Information.12/Information on the Company.13/Major Shareholders and Related party transactio
2、ns.13/Business Overview.14/Operating highlights.14 A.2 Underwriting performance.17/Aggregate underwriting performance.17/Underwriting performance by geographical area.17/Underwriting performance by product line.18 A.3 Investment performance.19/Net investment result.19/Gains and losses directly recog
3、nized in Equity.19/Investments in securitization.20 A.4 Performance of other activities.21/Net Income.21/Leasing arrangements.22 A.5 Any other information.23 B.SYSTEM OF GOVERNANCE.24 B.1 General information on the governance system.25/Governance.25/Compensation policy.25/Directors Fees.26/Executive
4、 Officers Benefits.26 B.2 Fit and proper requirements.27 B.3 Risk management system including the own risk and solvency assessment.28/Risk management system.28/Own Risk and Solvency Assessment.30 B.4 Internal control system.31 B.5 Internal audit function.31 B.6 Actuarial function.31 B.7 Outsourcing.
5、32 B.8 Any other information.33 C.RISK PROFILE.34/Foreword.35/Solvency II Capital Position.35 C.1 Underwriting Risk.37/Insurance Risk Exposure.37 AXA SA Solvency and Financial Condition Report 2022 3 AXA SA SFCR 2022/Risk Control and Risk Mitigation.38 C.2 Market Risk.39/Market Risk Exposure.39/Risk
6、 Control and Risk Mitigation.39 C.3 Credit Risk.40/Credit Risk Exposure.40/Risk Control and Risk Mitigation.40 C.4 Liquidity Risk.41 C.5 Operational Risk.42/General Principles.42 C.6 Other material Risks.43/Strategic Risk.43/Reputation Risk.43/Emerging Risks.43 C.7 Any other information.43 D.VALUATI
7、ON FOR SOLVENCY PURPOSES.44 Basis for preparation.45 D.1-Assets.47/Fair Value Measurement.47/Intangible Assets.49/Deferred taxes.50/Property,Plant&Equipment held for own use.50/Investments and loans.51/Derivative instruments.53/Reinsurance recoverables.53/Leasing arrangements.53/Assets held for inde
8、x-linked and unit-linked.54/Own shares.54/Unrealized foreign exchange gains/losses.54/Other assets.54 D.2 Technical provisions.55/General Principles.55/Best Estimate Liabilities.56/Statement on the use of the volatility adjustment.57/Statement on the use of the transitional measures for technical pr
9、ovisions.58/Risk margin.58/Reinsurance recoveries.58/Material changes in assumptions in 2022.59 D.3-Other liabilities.60/Contingent liabilities.60 AXA SA Solvency and Financial Condition Report 2022 4 AXA SA SFCR 2022/Provisions other than technical provisions.60/Pension benefit obligations.61/Defer
10、red taxes.61/Financial liabilities.61/Payables and deposits from reinsurers.62/Other liabilities.62 D.4 Alternative methods for valuation.63 D.5 Any other material information.63 E.CAPITAL MANAGEMENT.64 E.1 Own funds.65/Capital Management Objectives.65/Information on the Capital Structure.65/Change
11、in capital resources in 2022.65/Tiering Analysis of capital.66/Reconciliation to Local GAAP Shareholders equity.67 E.2 Solvency Capital Requirement and Minimum Capital Requirement.68/General principles.68/Solvency Capital Requirement(SCR).68/Minimum Capital Requirement(MCR).69 E.3 Use of the duratio
12、n-based equity risk sub-module in the calculation of the Solvency Capital Requirement.70 E.4 Differences between the standard formula and any internal model used.70 E.5 Non-compliance with the Minimum Capital Requirement and non-compliance with the Solvency Capital Requirement.70 E.6 Any other infor
13、mation.70 APPENDICES.71 Appendix I Annual Reporting Templates(QRTs).71 AXA SA Solvency and Financial Condition Report 2022 5 AXA SA SFCR 2022 This report is the Solvency and Financial Condition Report(SFCR)of AXA SA,the holding company of the AXA Group,for the reporting period ended December 31,2022
14、(this“Report”),pursuant to Article 51 of the Directive 2009/138/EC(the“Directive”)and articles 290 to 298 of the Delegated Regulation 2015/35(the“Regulation”and,together with the Directive,the“Solvency II Regulations”).The Report has been prepared in accordance with the Solvency II Regulations gover
15、ning reinsurance reporting and guidance from the European Insurance and Occupational Pensions Authority and the Autorit de Contrle Prudentiel et de Rsolution(ACPR-the French Prudential Supervision and Resolution Authority),and is solely intended to fulfil the requirements thereof.Relevant informatio
16、n about AXAs business is provided in AXAs Universal Registration Document for the year ended December 31,2022(the“Universal Registration Document”),which is available on AXAs website().Pursuant to Article 51 of the Directive,certain information provided in this Report is incorporated by reference to
17、 the Universal Registration Document.No information,document or material from the website of the Company or any other source shall form part of this Report,unless such information,document or material is expressly incorporated by reference into this Report.There are,however,certain specific SFCR req
18、uirements which are not already reported publicly elsewhere,and those are specifically included in this Report.Cautionary statement regarding forward looking statements This Report may include statements with respect to future events,trends,plans,expectations or objectives and other forward-looking
19、statements relating to the Groups future business,financial condition,results of operations,performance,and strategy.Forward-looking statements are not statements of historical fact and may contain the terms“may”,“will”,“should”,“continue”,“aims”,“estimates”,“projects”,“believes”,“intends”,“expects”
20、,“plans”,“seeks”or“anticipates”or words of similar meaning.Such statements are based on Managements current views and assumptions and,by nature,involve known and unknown risks and uncertainties;therefore,undue reliance should not be placed on them.Actual financial condition,results of operations,per
21、formance or events may differ materially from those expressed or implied in such forward-looking statements,due to a number of factors including,without limitation,general economic and political conditions and competitive situation;future financial market performance and conditions,including fluctua
22、tions in exchange and interest rates;frequency and severity of insured loss events,and increases in loss expenses;mortality and morbidity levels and trends;persistency levels;changes in laws,regulations and standards;the impact of acquisitions and disposal,including related integration issues,and re
23、organization measures;and general competitive factors,in each case on a local,regional,national and/or global basis.Many of these factors may be more likely to occur,or more pronounced,as a result of catastrophic events,including weather-related catastrophic events,pandemics,terrorist-related incide
24、nts or acts of war.Please refer to Part 5“Risk factors and Risk Management”of AXAs 2022 Universal Registration Document for a description of certain important factors,risks and uncertainties that may affect AXAs business and/or results of operations.AXA assumes no obligation to update or revise any
25、of these forward-looking statements,whether to reflect new information,future events or circumstances or otherwise,except as required by applicable laws and regulations.CERTAIN PRELIMINARY INFORMATION ABOUT THIS SFCR REPORT Transformation of AXA SA into a licensed reinsurer On May 10,2022,the Compan
26、y was granted a reinsurance license from the Autorit de Contrle Prudentiel et de Rsolution(ACPR the French Prudential Supervision and Resolution Authority)and,as of June 30,2022,completed its transformation into the AXA Groups internal reinsurer,following the merger of the Company with its captive r
27、einsurer AXA Global Re.AXA SA Solvency and Financial Condition Report 2022 6 AXA SA SFCR 2022 The merger was carried out in accordance with the provisions of Articles L.236-1 and subsequent and R.236-1 and subsequent of the French Commercial Code,and in particular Article L.236-11 of the French Comm
28、ercial Code relating to simplified mergers.The merger has a retroactive accounting effect to January 1,2022.Consequently,all active and passive transactions carried out by AXA Global Re(as the absorbed company)as of January 1,2022,relating to the assets contributed and liabilities assumed,will be co
29、nsidered as having been carried out on behalf of the Company(as the absorbing company).At the time prior to the completion of the merger,the operational reinsurance management activity and all current employment contracts and resources attached to this activity of AXA Global Re(the Activity)were tra
30、nsferred to the GIE AXA.The resources required to carry out the reinsurance activity are made available to this segment and the costs of the GIE AXA employees assigned to these missions are re-invoiced by GIE AXA to the reinsurance segment of the Company.The transfer of the Activity to the GIE AXA,w
31、hich groups together the AXA Groups central functions,makes it possible to strengthen the strategic nature of the AXA Groups internal reinsurance,while ensuring the operational security of AXA SAs new reinsurance activity and enabling the creation of value for the various AXA Group entities.The annu
32、al financial statements of the Company for the year 2022 have been prepared following the merger of AXA Global Re into the Company,in accordance with the accounting provisions set out in Title IV of Book III of the French Insurance Code and with the Autorit des Normes Comptables(ANC)regulation no.20
33、15-11 of November 26,2015,approved by the decree of December 28,2015,relating to the annual financial statements of insurance companies,amended by ANC Regulation No.2016-12 of December 12,2016,amended by ANC Regulation No.2018-08 of December 11,2018 and amended by ANC Regulation No.2020-11 of Decemb
34、er 22,2020.In the absence of specific provisions provided for in ANC regulation no.2015-11 mentioned above,the provisions of ANC regulation no.2014-03 relating to the general chart of accounts are applicable.The statutory and Solvency II accounts of the Company are still prepared under two distinct
35、internal segments:the holding activity and the reinsurance activity.The accounts of the two segments are then aggregated to form the statutory and Solvency II accounts of the Company.Further to this transformation,the operations can be split as follows:-As the holding company of the AXA Group,the co
36、ntinuing historical Holding activities of the AXA Group.These remain unchanged in substance as compared to the pre-merger balance sheet of the Company,and still represent by far the majority part of both its balance sheet and its statement of income going forward,-and as the captive reinsurance comp
37、any of the AXA Group,the continuing Reinsurance activities through centralizing the negotiation and placement of outward reinsurance protecting the Group.This is achieved by internal non-proportional(e.g.,excess of loss)and proportional reinsurance treaties whereby the Company reinsures AXAs local e
38、ntities and cedes risks externally to reinsurers.Presentation of the information In this Report unless provided otherwise:the“Company”,and/or“AXA SA”refer to AXA SA,a“socit anonyme”organized under the laws of France.AXA SA is the reinsurance company of the P&C and Life insurance entities of the AXA
39、Group.“2021”or“December 31,2021”is the audited financial statements of AXA SA and AXA Global Re 2021 respectively.If any,“2021 Proforma”or“December 31,2021,Proforma”is the non-audited total of AXA SA and AXA Global Re only for comparison purpose.AXA SA Solvency and Financial Condition Report 2022 7
40、AXA SA SFCR 2022 SUMMARY Pursuant to the Solvency II Regulations,the following is a summary overview of each section of this report.Please refer to each section in its entirety,including materials incorporated by reference therein,if any.The European Union developed a regulatory regime for European
41、insurers which became effective on January 1,2016,following the adoption of the 2009 Solvency II Directive on the taking-up and pursuit of the business of insurance and reinsurance,as amended in 2014 by the 2014/51/EU Directive(“Omnibus II”).The regime is designed to implement solvency requirements
42、that better reflect the risks that insurance companies face and establish a supervisory system that is consistent across all European Member States.The Solvency II framework is based on three main pillars:(1)Pillar 1 consists of the quantitative requirements around own funds,valuation rules for asse
43、ts and liabilities and capital requirements,(2)Pillar 2 sets out qualitative requirements for the governance and risk management of insurers,as well as for the effective supervision of insurers including the requirement for insurers to submit an Own Risk and Solvency Assessment(ORSA)which will be us
44、ed by the regulator as part of the supervisory review process;and(3)Pillar 3 focuses on enhanced reporting and disclosure requirements.The Solvency II framework covers,among other matters,valuation of assets and liabilities,the treatment of insurance groups,the definition of own funds and the level
45、of required capital.Significant business developments that have occurred over the reporting period include the new property and casualty(”P&C”)quota-share(”QS”)reinsurance treaties implemented in 2022(3,082 million premiums impact in 2022),in connection with the transformation of the Company into a
46、licensed reinsurer.Our business and performance(Section A)The Company,as the holding company of the AXA Group,manages the Group Capital Management activities to optimize capital use and return.It centralizes Group excess capital and provides access to external financing(debts,equity,credit facilitie
47、s).The company also manages the interest rate of its debts as well as the exposure of its participations to currency variations through derivatives to hedge the consolidated balance sheet.While the use of derivatives has been decreasing at the Company level,the Companys statutory results may be sign
48、ificantly impacted by unrealized gains and losses on derivatives used to hedge,in particular,currency and interest rate risks.In addition,since it became a regulated reinsurer in 2022,the Company operates reinsurance activities whose liquidity resources and needs are monitored separately.The Company
49、 is the captive reinsurance company of the AXA Group,reinsuring the insurance entities of the AXA Group for both P&C and Life.The Company is in charge of the analysis,structuring and placement of reinsurance treaties on behalf of AXA Group insurance companies to a selection of third-party reinsurers
50、 while retaining a share of those protections in compliance with Group and AXA SAs risk appetite.Total revenues increased by 1,971 million to 5,934 million in 2022 compared to 3,963 million in 2021 mainly explained by the P&C quota-shares reinsurance treaties implemented in 2022(3,082 million premiu
51、ms impact in 2022),partly offset by the non-recurrence of another internal reinsurance treaty.Net income from the holding activity decreased by-190 million to 2,629 million mainly driven by-187 million on non-technical income and expenses,of which-123 million of provision on unrealized losses on for
52、eign exchange options as part of the protection of the company cash flows and-40 million from continued investments in the IT transformation.AXA SA Solvency and Financial Condition Report 2022 8 AXA SA SFCR 2022 Net income from the reinsurance activities on a pre-tax basis decreased by-73 million to
53、 180 million mainly driven by-125 million on Net technical result before expenses,partly offset by+40 million on net investment result.The net reinsurance combined ratio is 87.0%for 2022,an improvement of 1.3 points from 88.3%for 2021.Net income of the Company amounted to 2,809 million compared to 2
54、,8191 million in 2021,this included only the holding activity.Our system of governance(Section B)AXA SA is a French socit anonyme and the holding company of the AXA Group,as well as licensed reinsurer since May 2022.The Company operates with a unitary Board of Directors,a Chairman and a Chief Execut
55、ive Officer.The Executive Management of the Company comprises the Chief Executive Officer and the two Deputy Chief Executive Officers(Directeurs Gnraux Adjoints)who,under Solvency II,are deemed to be the“persons who effectively run”the Company(dirigeants effectifs).The Board of Directors is assisted
56、 by three Board Committees:the Audit Committee,the Finance&Risk Committee and the Compensation,Governance&Sustainability Committee.As further described in Section B.2.of this report,the Company has four key functions,as required by Solvency II regulations:1)Risk Management,2)Compliance,3)Internal Au
57、dit,and 4)Actuarial.Each holder of a key function has a direct link to one of the persons who effectively runs the Company(dirigeants effectifs),and a direct access to the Board of Directors.As the holding company of the AXA Group,the Company carries on its balance sheet and manages the investments
58、in the Groups subsidiaries.It steers and monitors the Groups strategic,financial,regulatory,communications,human resources and control activities.The Company is responsible for M&A operations,external financing(access,investor relations,dividends)and hedging activities for AXA Group.As a reinsurance
59、 company,AXA SA is engaged in the reinsurance of AXA P&C and Life entities worldwide.As a consequence,the Company is exposed to a very wide variety of risks,including financial risks,reinsurance risks,and other types of risks.As an integrated part of all business processes,Risk Management is respons
60、ible for the definition and the deployment of the Enterprise Risk Management(ERM)framework within the Company,including the conduct of the Own Risk&Solvency Assessment(ORSA).In order to mitigate the wide variety of risks it is exposed to,the Company has put in place a comprehensive system of interna
61、l controls designed to ensure that executives are informed of significant risks on a timely and continuous basis and have the necessary information and tools to appropriately analyse and manage these risks,and that Companys financial statements and other market disclosures are timely and accurate.Ou
62、r risk profile(Section C)In presenting the risks set forth below,management has prioritized the three categories of risks in a manner that corresponds to managements current view as to the potential impact(from higher to lower)of the risks for the Company.1 The 2021 net income of the Company,pre-mer
63、ger,therefore does not include the profitability of the reinsurance.AXA SA Solvency and Financial Condition Report 2022 9 AXA SA SFCR 2022 Risks relating to the financial markets and financial position The Company is exposed to financial risks through its participations in entities,investments backi
64、ng its reinsurance activities and financing of its holding activities in the capital management framework.The main financial risks for the Company are as follows:Equity and concentration risk related to its holding role,Currency risk related to its participations in foreign currency,interest-rate,sp
65、read risk related to its investments and financing,credit risk,liquidity risk.A wide variety of risk management techniques are used to control and mitigate the market risks to which the Company is exposed.These techniques include Hedging strategies,Asset&Liability Management(ALM),disciplined investm
66、ent approval process,regular monitoring of the liquidity and solvency position of the Company,and reinsurance which also offers solutions to mitigate certain financial risks.Risks relating to the scope and nature of our business,the contracts we sell and our operations Reinsurance underwriting risks
67、 are covered through four major processes,defined at Group level but performed jointly by central and local teams,to control and mitigate these risks:Risk controls on new treaties that complement underwriting rules and profitability analyses,Optimizing ceded reinsurance strategies in order to limit
68、the peak exposures of the Company by protecting its solvency by reducing volatility,Reviewing technical reserves,Monitoring emerging risks to share expertise within the underwriting and risk communities.Risks relating to the evolving regulatory and competitive environment in which the Company operat
69、es In addition to risks that bear a capital charge through Solvency Capital Requirement(SCR)calculation,AXA Group,and therefore also the Company,considers liquidity risk,reputation risk,strategic risk,regulatory risk as well as emerging threats and impact of transversal adverse scenarios.Valuation f
70、or solvency purposes(Section D)AXA SAs Solvency II balance sheet was prepared as of December 31,2022,in compliance with the Solvency II Regulations.Capital management(Section E)Solvency II ratio at December 31,2022,amounted to 254%,it increased by+12pts as compared to December 31,2021 on a proforma
71、basis.Eligible own funds(EOF)increased by+3,709 million to 58,317 million,during the reporting period driven by a business activity return during the period(+2,647 million)and by the recognition of the subordinated debts(+6,047 million),partly offset by a proposed dividend to be paid and a planned S
72、hare Buy-Back program in 2023(-4,950 million).Solvency Capital Requirement(SCR)increased by+369 million to 22,961 million after diversification mainly due to the evolution of the Market risks and P&C risks.AXA SA Solvency and Financial Condition Report 2022 10 AXA SA SFCR 2022 (In Euro million,excep
73、t Solvency Ratio data)2022 Of which:Holding activity Of which:Reinsurance activities 22021 Proforma 2021 AXA SA 2021 AXA Global Re Income Statement Data(Statutory)Total Revenues 5,934 N/A 5,934 N/A N/A 3,963 Operating income before investment results-562-657 95 N/A-424 209 Net investment results 3,0
74、35 2,950 85 N/A 2,579 45 Net income 2,809 2,629 180 N/A 2,819 182 Balance Sheet Data(SII Solo)Total assets 94,236 N/A N/A 90,807 N/A 9,937 Available capital 58,317 N/A N/A 54,609 N/A 974 Capital Requirement Data Solvency Capital Requirement(SCR)22,961 N/A N/A 22,592 N/A 677 Solvency II ratio 254%N/A
75、 N/A 242%N/A 144%AXA SA Solvency and Financial Condition Report 2022 11 AXA SA SFCR 2022 A.BUSINESS AND PERFORMANCE A.1 Business General information Information on the Company Major Shareholders and Related party transactions Business Overview Operating highlights A.2 Underwriting Performance Aggreg
76、ate underwriting performance Underwriting performance by geographical area Underwriting performance by product line A.3 Investment Performance Net investment result Gains and losses directly recognized in Equity Investments in securitization A.4 Performance of other activities Net Income Leasing Arr
77、angements A.5 Any other information AXA SA Solvency and Financial Condition Report 2022 12 AXA SA SFCR 2022 A.1 Business /General Information AXA SA is the holding company of the AXA Group,a worldwide leader in Insurance,with total assets of 94.2 billion for the year ended December 31,2022.AXA SA is
78、 also the internal reinsurance company of the P&C and Life insurance entities of the AXA Group.Information on the Companys governance structure is included in Section B“System of Governance”of this Report.The principal transactions within the Company are managing investments in subsidiaries,financin
79、g,reinsurance,hedging and off-balance sheet guarantees.Financing At the end of 2022,the Company owned investments in affiliated undertakings and in undertakings with which a participating interest exists for net value of 75.4 billion.In 2022,it received 4.3 billion of dividends.The main participatio
80、n was related to AXA France Vie and amounted to 10.1 billion.The Company was in a borrowing position towards its subsidiaries for 15.5 billion and in a lending position for a total of 0.4 billion,on a statutory basis.Additional information on(i)AXA SA participation in its subsidiaries,(ii)dividends
81、received by the Company from its subsidiaries,(iii)AXA SA receivables from subsidiaries,and(iv)loans granted by the Company to its subsidiaries is incorporated herein by reference to Appendix III on pages 480 to 482,page 492 and pages 506 to 509 of AXAs 2022 Universal Registration Document.Reinsuran
82、ce The Groups operating entities are mainly reinsured by the Company which had a total reinsurance recoverable of 4.7 billion in 2022.A portion of the risk exposure is retained and mitigated within the Company through the internal Group covers(including pools)and the remaining part is ceded to exter
83、nal reinsurers.Additional information on those pools that apply to the Company is incorporated herein by reference to Section 5.6“Insurance Risks-Reinsurance strategy”on page 283 of AXAs 2022 Universal Registration Document.Hedging At the end of 2022,derivatives were registered for a notional amount
84、 of 43.0 billion.Off-balance sheet guarantees Internal off-balance sheet guarantees are issued by the Company to its subsidiaries and amounted to 7.3 billion.Additional information on guarantees given by the Company to its subsidiaries is incorporated herein by reference to Note 28.3“Loans/guarantee
85、s/capital contributions,etc.”in Part 6“Consolidated Financial Statements”on pages 433 and 434 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 13 AXA SA SFCR 2022/Information on the Company AXA SA,Socit Anonyme AXA is a socit anonyme(a public limited c
86、ompany)organized under the laws of France.The Companys registered office is located at 25,avenue Matignon,75008 Paris,France and its telephone number is+33(0)1 40 75 57 00.The Company was incorporated in 1957 but the origin of its activities dates to 1852.The Companys corporate existence will contin
87、ue,subject to dissolution or prolongation,until December 31,2059.The Company is registered with the Paris Trade and Companies Register(Registre du Commerce et des Socits)under number 572 093 920.AXAs legal entity identifier(LEI)is F5WCUMTUM4RKZ1MAIE39.Supervisory authority AXA SAs principal supervis
88、ory authorities are the AMF(Autorit des marchs financiers),which is the financial markets regulator and the French Autorit de Contrle Prudentiel et de Rsolution(“ACPR”)which is the insurance,reinsurance and financial services regulator and also the principal supervisor of the AXA Group.AXA SA is eng
89、aged in regulated business activities on a global basis.Given that AXA SA is headquartered in Paris,France,this supervision is based to a significant extent on European Union directives and on the French regulatory system.AUTORITE DE CONTROLE PRUDENTIEL ET DE RESOLUTION:4,Place de Budapest CS 92459-
90、75436 Paris,+33(0)1 49 95 40 00 AUTORITE DES MARCHES FINANCIERS:17 place de la Bourse 75082 Paris Cedex 02,01 53 45 60 00 Statutory auditors The statutory auditors are PriceWaterhouseCoopers Audit and Ernst&Young Audit.PriceWaterhouseCoopers(“PWC”)Audit:63,rue de Villiers-92208 Neuilly-sur-Seine Ced
91、ex,represented by Mrs.Bndicte Vignon and Mr.Grgory Saugner,whose the first term began on February 28,1989.The current mandate appointment is for a term of 6 years,until the General Shareholders Meeting called to approve the financial statements for the fiscal year 2023.Ernst&Young(“E&Y”)Audit:1-2 pl
92、ace des Saisons-Paris le Dfense 1-92 400 Courbevoie,represented by Olivier Durand and Patrick Menard.The current mandate appointment is for a term of 6 years,until the General Shareholders Meeting called to approve the financial statements for the fiscal year 2027./Major Shareholders and Related par
93、ty transactions Capital ownership A description of AXA SAs capital ownership is incorporated herein by reference to Part 7.2“Share capital”in pages 451 to 453 of AXAs 2022 Universal Registration Document.Material related undertakings A list of the AXA SAs subsidiaries and significant participating i
94、nterests is included in this Report by reference to pages 506 to 509 in Appendix III of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 14 AXA SA SFCR 2022 Group Structure The below chart presents the simplified Group structure as of December 31,2022 /Bu
95、siness Overview Material lines and geographical areas of business AXA SA is the captive reinsurance company of AXA Group,reinsuring the insurance entities of the AXA Group for both P&C and Life.AXA SA is in charge of the analysis,structuring and placement of reinsurance treaties on behalf of AXA Gro
96、up insurance companies to a selection of third-party reinsurers while retaining a share of those protections in compliance with Group and AXA SAs risk appetite.The important geographical areas are presented in Section A.2,in which the underwriting performance by geographical area is presented./Opera
97、ting highlights Significant Business developments and Other Events 2022 financing campaign(holding activities)Dividends received from Group subsidiaries Dividends received by the Company from its subsidiaries amounted to 4,345 million in 2022(3,495 million in 2021),of which 1,939 million were denomi
98、nated in currencies other than Euro(1,763 million in 2021).MUTUELLES AXA AXA SA GENERAL PUBLIC EMPLOYEES AND AGENTS AXA HOLDING COMPANIES&SUBSIDIARIES 15.37%/(25.67%)(*)4.20%/(6.00%)(*)76.72%/(65.23%)(*)(*)%ownership/(%voting rights)both,on December 31,2022 TREASURY SHARES HELD DIRECTLY BY THE COMPA
99、NY 3.71%/(3.10%)(*)AXA SA Solvency and Financial Condition Report 2022 15 AXA SA SFCR 2022 Uses of funds Interest paid by the Company in 2022 amounted to 988 million(921 million in 2021),of which interest on undated subordinated debt was 290 million(265 million in 2021).Dividends paid to AXA SAs sha
100、reholders in 2022 in respect of the 2021 financial year amounted to 3,539 million,or 1.54 per share,versus 1.43 per share paid in 2021 in respect of the 2020 financial year(3,403 million in total).Those dividends were paid in cash.In 2022,the Company repurchased 2,311 million of its own shares for p
101、urposes other than eliminating the dilutive impact on the Groups Underlying earnings per share from employee share offerings and/or the exercise of stock options,including(i)803,3 million under the 1,700 million share buy-back program announced in November 2021,(ii)500 million under the share buy-ba
102、ck program announced in February 2022,and(iii)1,000 million under a discretionary share buy-back program announced in September 2022.For additional information,please refer to Appendix III of AXAs 2022 Universal Registration Document 2022 renewal campaign(Reinsurance activities)2022 reinsurance rene
103、wal campaign was notably marked by the significant market tension in CAT and Cyber following the industrys elevated natural catastrophes(“Nat CAT”)losses and concerns on the rising trend of Cyber-related incidents.Total NAT CAT insured losses reached$116bn in 2021,63%higher than 10-y average.Insuran
104、ce-Linked Securities(“ILS”)capital deployment,which mainly provided retro capacity,shrank by 25%.Due to less access to retro capacity,many reinsurers significantly limited their appetite for CAT(or completely exited e.g.,Unipol Re),shifted to Non-CAT to rebalance portfolio mix and limited pricing el
105、asticity in capacity deployment.Significant rate increase was materialized in CAT with Europe at the heart of repricing.European CAT recorded rate increases up to 50%+for loss-affected accounts while US rate increase up to+25%on risk-adjusted basis.The rate uplift in retro was up to 30%+(when capaci
106、ty was still offered)with significant variability and particular challenges in aggregate cover and lower layers.On Non-CAT renewals,Cyber renewals saw significant rate hike with average risk-adjusted increase of+20%,which was mainly due to the cautious stance taken by reinsurers facing a substantial
107、 surge in attacks and average cost of ransomware seen in the primary market.Other lines of business were overall renewed on merits.Reinsurers looked for pay-back on losses and put forward inflation to try to increase rates across lines of business.Overall,the AXA Group 2022 Reinsurance programs aims
108、 at(1)adhering to the Group Risk Appetite limits;(2)continuing to limit the potential impacts of volatility from CAT and man-made losses and(3)optimizing structures following the exposure evolution(mainly AXA XLs exposure reduction)and navigating through the continuously hardening environment.Main 2
109、022 changes The main changes on the Group CAT program consisted of(1)non-renewal of Enterprise Aggregate Excess of Loss(“XoL”);(2)Group CAT XoL which was renewed with(i)overall stable attachment points except for lower attachment for North Atlantic Hurricane Earthquake,(ii)less capacity bought on pe
110、ak perils to reflect the decrease in gross CAT risk,(iii)more capacity bought on European Flood and Earthquake to uncap“simple risks”.AXA SA Solvency and Financial Condition Report 2022 16 AXA SA SFCR 2022 Regarding Non-CAT renewals,Group covers were mostly renewed as expiring.The main changes inclu
111、ded(1)separate stand-alone placements for Group Motor Third-Party Liability(”MTPL”)and Group Personal Accident/Workers Compensation(“PA/WC”)covers compared to the combined treaty in 2021 due to placement difficulties and limited appetite for the complex bundled scope;(2)a unified Group Cyber QS with
112、 enlarged scope of entities and a recalibrated Group Aggregate XoL with lower attachment point compared to 2021.Following the transformation of the Company into a regulated reinsurance company in 2022,AXA SA reinsures for 2022 certain of its European P&C carriers,through annually renewable 25%quota-
113、share reinsurance treaties,with retroactive effect to January 1,2022.Reinsurance claims 2022 was mainly marked by property CAT claims impacting the Property Pool coming from the European hailstorms.AXA SAs other lines of business were not impacted by significant claims.Financial ratings:At the date
114、of this Report,the relevant ratings for the Company were as follows:AM Best:On July 8,2022,AM Best assigned a financial strength rating to AXA S.A.of A+(Superior),with a stable outlook,as well as a long-term issuer credit rating of aa-(Superior).Moodys:On July 1,2022,Moodys Investors Service reaffir
115、med the financial strength rating of AXAs core subsidiaries at Aa3,with a stable outlook.Moodys Investors Service also assigned AXA S.A.a financial strength rating at Aa3 and upgraded AXA S.A.s long-term senior debt rating from A2 to A1.S&P:On March 28,2022,S&P Global Ratings reaffirmed the financia
116、l strength rating of AXA cores operating subsidiaries at AA-,with a stable outlook.On May 11,2022,S&P Global Ratings also assigned AXA S.A.a financial strength rating at A+and upgraded AXA S.A.s long term issuer credit rating from A to A+.AXA SA Solvency and Financial Condition Report 2022 17 AXA SA
117、 SFCR 2022 A.2 Underwriting performance /Aggregate underwriting performance Statutory operating income and expenses (in Euro million)December 31,2022 Of which:Holding activity Of which:Reinsurance activities December 31,2021 AXA SA December 31,2021 AXA Global Re Gross revenues 5,934 5,934 3,963 Net
118、technical margin 73 73 199 Expenses-517-474-43-434-45 Other operating-118-183 65 10 55 Operating income before investment results-562-657 95-424 209 AXA SAs operating income before investment results for the financial year ended December 31,2022,was a loss of 562 million,of which-657 million for the
119、 holding activity and+95 million for the reinsurance business.Operating income as of December 31,2021 amounted to-424 million for the holding activity and+209 million for the reinsurance business.Operating income from the holding activity:Expenses and Other operating decreased by-233 million,of whic
120、h-187 million from the result on the non-technical income and expenses mainly due 123 million of provision on unrealized losses on foreign exchange options as part of the protection of the company cash flows and 40 million increase due to continued investments in the IT transformation.-Operating inc
121、ome from the reinsurance activities:Net technical margin decreased by-126 million to 73 million mainly due to the recognition of a provision of 92 million following the deviation of claims recorded in a life insurance treaty.Expenses and Other operating increased by+11 million mainly due to a+7 mill
122、ion exceptional result./Underwriting performance by geographical area The Company is an international reinsurance company with revenues stemming from various geographic area.AXA SA Solvency and Financial Condition Report 2022 18 AXA SA SFCR 2022 Gross revenues by geographical area (in Euro million e
123、xcept percentages)2022 2021 France 1,961 33%267 7%Germany 1,377 23%1,389 35%United Kingdom 1,001 17%413 10%Spain 510 9%39 1%Italy 457 8%65 2%South Korea 162 3%139 4%Mexico 107 2%108 3%Other countries 359 6%1,543 39%TOTAL 5,934 100%3,963 100%/Underwriting performance by product line Gross revenues by
124、 product line (in Euro million except percentages)2022 2021 Property Damage 2,443 41%1,648 42%Motor 2,211 37%746 19%Casualty/Civil Liability 763 13%1,153 29%Marine,Aviation 188 3%299 8%Life 93 2%79 2%Other 236 4%37 1%TOTAL 5,934 100%3,963 100%Gross revenues increased by 1,971 million(+50%)to 5,934 m
125、illion mainly due to P&C quota-shares reinsurance treaties(3,082 million)implemented in 2022.It represents 52%of AXA SAs gross revenues.This is partly offset by the non-recurrence of another internal reinsurance treaty.The exchange rates variation had a positive impact(+30 million),of which the vari
126、ations by main currencies are shown below:FX impact(in million)FX 2022 FX 2021 Variation(%)USD 19 0.971 0.888 9%MXN 9 0.050 0.041 21%HKD 6 0.124 0.114 9%AXA SA Solvency and Financial Condition Report 2022 19 AXA SA SFCR 2022 A.3 Investment performance /Net investment result Statutory net investment
127、result from the financial assets of the Company in 2022 was as follows:December 31,2022(in Euro million)Net investment income Net realized gains and losses Change in investment impairment Net investment result Investment in real estate properties 1 0 1 2 Debt instruments 26-3-23 Equity instruments 4
128、,268 55-598 3,725 Investment funds 2 34-36 Loans 2-2 Derivative instruments 185 47-231 Borrowings-Asset management fees-Other-804-175-6-985 TOTAL 3,681-42-603 3,035 Statutory net investment result from the financial assets of the Company on a proforma basis in 2021 was as follows:December 31,2021(Pr
129、oforma)(in Euro million)Net investment income Net realized gains and losses Change in investment impairment Net investment result Investment in real estate properties 3 -0 2 Debt instruments 17 0-17 Equity instruments 3,443-559 525 3,410 Investment funds 1 1-3 Loans 2-2 Derivative instruments 128 30
130、-158 Borrowings-Asset management fees-Other-828-137-4-969 TOTAL 2,766-664 521 2,623 Net Investment result amounted to 3,035 million in 2022,up+412 million compared to 2021,mainly due to+850 million in dividends received from subsidiaries,amounting to 4,345 million compared to 3,495 million in 2021,p
131、artly offset by additional allowances for impairment on investments in subsidiaries by-507 million./Gains and losses directly recognized in Equity Not applicable,as under French GAAP there are no such gains/losses directly recognized in Equity.Hence for AXA SA this section is not applicable.AXA SA S
132、olvency and Financial Condition Report 2022 20 AXA SA SFCR 2022/Investments in securitization As of December 31,2022,AXA SAs investments included a net exposure to Collateralized Loan Obligations(CLO),Consumer Asset Backed Securities(Consumer ABS),Prime Residential Mortgage Backed Securities(Prime R
133、MBS)and US subprime Residential Mortgage Backed Securities(Non-conforming RMBS)of approximately 29 million(of which 96%was exposure to CLO).AXA SA Solvency and Financial Condition Report 2022 21 AXA SA SFCR 2022 A.4 Performance of other activities /Net Income (in Euro million,except percentages)Dece
134、mber 31,2022 Of which:Holding activity Of which:Reinsurance activities December 31,2021 AXA SA December 31,2021 AXA Global Re Gross revenues 5,934 5,934 3,963 Current year loss ratio(net)78.3%78.3%76.5%All year loss ratio(net)86.0%86.0%86.5%Net technical result before expense 73 73 197 Service resul
135、t 58 58 58 General expenses-517-474-43-434-45 Expense ratio 11.6%1.0%1.8%Net investment result 3,035 2,950 85 2,579 45 Other income/expenses-176-183 7 10-2 Income tax expenses/benefits 336 336 665-71 NET INCOME 2,809 2,629 180 2,819 182 Reallocation net investment income-101 101-NET INCOME(Local GAA
136、P of the Company)2,809 2,528 281 2,819 182 AXA SAs corporate income after tax for the financial year ended December 31,2022,was a profit of 2,809 million,of which 2,528 million for the holding activity and 281 million for the reinsurance business after the reallocation of 185 million net investment
137、income according to the weighting of the net technical reserves and the shareholders equity.This reallocated amount exceeds by 101 million the financial result specific to the reinsurance business.To provide a more economical view,the financial result specific to each activity in the table above and
138、 for the analysis below was kept.Income as of December 31,2021,amounted to 2,819 million from the holding activity and 182 million from the reinsurance business.Net income from the holding activity decreased by-190 million to 2,629 million mainly driven by:Net investment result amounted to 2,950 mil
139、lion,increasing by 371 million,of which:-850 million in dividends received from subsidiaries,amounting to 4,345 million compared to 3,495 million in 2021,-partly offset by additional allowances for impairment on investments in subsidiaries by 507 million.Non-technical income and expenses show a defi
140、cit of 606 million compared to 419 million in 2021,of which:-123 million of provision on unrealized losses on foreign exchange options as part of the protection of the company cash flows,-40 million increase due to continued investments in the IT transformation.Corporate tax income amounted to 336 m
141、illion,of which 448 million of tax receivables on members of the tax consolidation group partially offset by a provision of 54 million for the possible repayment of tax savings on subsidiaries belonging to the tax consolidation group.The tax expense relating to the reinsurance business is now report
142、ed under the holding activity.AXA SA Solvency and Financial Condition Report 2022 22 AXA SA SFCR 2022 Net income from the reinsurance activities on a pre-tax basis decreased by-73 million to 180 million mainly driven by:Net technical result before expenses amounted to 73 million,decreasing by-125 mi
143、llion mainly due to the recognition of a provision of 92 million following the deviation of claims recorded in a life insurance treaty.General expenses are at 43 million,decreasing by 2 million.Net investment result amounted 85 million,increasing by 40 million due to capital gains of 34 million on t
144、he sale of investment securities./Leasing arrangements No material leasing arrangements.AXA SA Solvency and Financial Condition Report 2022 23 AXA SA SFCR 2022 A.5 Any other information AXA announced the successful placement of 750 million senior notes due 2033 On January 4,2023,AXA announced the su
145、ccessful placement of 750 million of Reg S senior unsecured notes due 2033 with institutional investors.The notes will be used for general corporate purposes,including the refinancing of part of the Groups outstanding debt.The notes have a fixed annual coupon of 3.625%.Investor demand was strong wit
146、h a book subscribed close to 3 times.The notes are rated A+/Stable by Standard&Poors and A1/Stable by Moodys.The settlement of the notes took place on January 10,2023.Execution of a share repurchase agreement in relation to AXAs share buy-back program of up to Euro 1.1 billion as announced on Februa
147、ry 23,2023 On February 24,2023,AXA has executed a share repurchase agreement with an investment services provider,whereby AXA will buy back its own shares for a maximum amount of 1.1 billion,as communicated on February 23,2023.The share repurchase agreement will be executed in accordance with the te
148、rms of the applicable Shareholders Annual General Meeting authorization.Under the share repurchase agreement announced on February 23,2023,shares will be bought back commencing on February 27,2023,and ending at the latest on May 16,2023.On each day during the purchase period,the price per share to b
149、e paid by AXA is determined on the basis of the volume-weighted average share price.AXA intends to cancel all shares repurchased pursuant to this share buy-back program.Information regarding share buy-back programs is disclosed on the AXA Group website.AXA SA Solvency and Financial Condition Report
150、2022 24 AXA SA SFCR 2022 B.SYSTEM OF GOVERNANCE B.1 General information on the governance system Governance Compensation policy Directors Fees Executive Officers Benefits B.2 Fit and proper requirements B.3 Risk management system including the own risk and solvency assessment Risk management system
151、Own Risk and Solvency Assessment B.4 Internal control system B.5 Internal audit function B.6 Actuarial function B.7 Outsourcing B.8 Any other information AXA SA Solvency and Financial Condition Report 2022 25 AXA SA SFCR 2022 B.1 General information on the governance system /Governance A description
152、 of AXAs governance,including the items referred to in Article 294(1)and Article 359(b)of the Solvency II Regulation,is incorporated herein by reference to Part 3“Corporate governance”in pages 94 to 125 of AXAs 2022 Universal Registration Document./Compensation policy Compensation policy The Company
153、 applies the AXA Groups Remuneration policy.A description of Groups remuneration policy that applies to the Company is incorporated herein by reference to Part 3.2“Executive compensation and share ownership”in pages 126 to 158 of AXAs 2022 Universal Registration Document.The Remuneration Policy is c
154、onsistent with the integration of sustainability risks within the meaning of,and as required by Regulation(EU)2019/2088 of November 27,2019,as amended.In 2021,the integration of sustainability risks has been enhanced for both short-term and long-term remuneration components:The weight of sustainabil
155、ity criteria in performance conditions of AXA LTI(Performance Shares)has been increased from 10%in 2020 to 30%in 2021.Achievement on specific climate-related targets(i.e.,reduction of(i)operations carbon emissions and(ii)carbon footprint of assets)complements the target on AXAs score on the Dow Jone
156、s Sustainability Index(assessing Environmental,Social and Governance dimensions).Targets and calibration of all financial and non-financial criteria are reviewed annually by the Board of Directors,The target letters for Market/Operational Entity CEOs include sustainability qualitative criteria.Compe
157、nsation of the Executive officers A description of the Compensation of the Executive officers that applies to the Company is incorporated herein by reference to Part 3.2“Executive compensation and share ownership”in pages 126 to 158 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Fi
158、nancial Condition Report 2022 26 AXA SA SFCR 2022 /Directors Fees A description of the Directors Fees that applies to the Company is incorporated herein by reference to Part 3.2“Executive compensation and share ownership Directors Fees”in pages 136 to 137 of AXAs 2022 Universal Registration Document
159、./Executive Officers Benefits Pension A description of the Executive Officers Benefits that applies to the Company is incorporated herein by reference to Part 3.2“Executive compensation and share ownership Commitments made to executive officers”in pages 152 to 153 of AXAs 2022 Universal Registration
160、 Document.AXA SA Solvency and Financial Condition Report 2022 27 AXA SA SFCR 2022 B.2 Fit and proper requirements Main roles and responsibilities of key functions The Solvency II regulations require the Company to have in place an effective system of governance designed which provides for a sound an
161、d prudent management.This governance system must be based on a clear separation of responsibilities and must be proportionate to the nature,extent and complexity of the Companys operations.In addition to the Chief Executive Officer and the Deputy Chief Executive Officers(Directeurs Gnraux Adjoints),
162、the Company has defined four key functions in accordance with the Solvency II regulations:the Risk Management function,which is,in particular,responsible for the definition,the deployment and monitoring of the Enterprise Risk Management(ERM)framework within AXA SA,the Compliance function,which is,in
163、 particular,responsible for advising on compliance with the laws,regulations and administrative provisions regarding reinsurance activities as well as ensuring that compliance is effective,the Internal Audit function,which is,in particular,responsible for performing an evaluation of the adequacy and
164、 effectiveness of AXA SAs internal control system and other elements of the system of governance.The internal audit function must be objective and independent from the operational functions and,the Actuarial function,which is,in particular,responsible for overseeing the calculation of technical prov
165、isions(including ensuring the appropriateness of the methodologies and underlying models used as well as the assumptions made in the calculation of technical provisions),assessing the sufficiency and quality of the data used in the calculation of technical provisions and comparing best estimates aga
166、inst experience.Within the Company,the key function holders are:The AXA Group and AXA SAs Chief Risk Officer,The Global Head of Internal Audit,The AXA Group and AXA SAs Chief Compliance Officer,AXA SAs actuarial reserving manager.A description of the AXA Groups Fit and proper policy which also appli
167、es to the Company is incorporated herein by reference to Section 5.2“Internal Control and Risk Management”on pages 255 to 268 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 28 AXA SA SFCR 2022 B.3 Risk management system including the own risk and sol
168、vency assessment /Risk management system Risk management missions As an integrated part of all business processes,Risk Management is responsible for the definition and the deployment of the Enterprise Risk Management(ERM)framework within AXA SA.Risk Management is responsible for developing the Enter
169、prise Risk Management framework in terms of limits/thresholds(covering Financial,Insurance and Operational risks),policies,guidelines and monitoring of the risk exposure,subject to Group standards and within a clearly defined Risk Appetite consistent with the Groups Risk Appetite.The ERM framework i
170、s based on five pillars,cemented by a strong risk culture.A description of the five pillars that apply to the Company is incorporated herein by reference to Section 5.2“Internal Control and Risk Management”on pages 259 to 260 of AXAs 2022 Universal Registration Document.AXA SA Risk Management Risk M
171、anagement is a local responsibility,in accordance with Group Risk Management standards and guidelines.The minimum missions required for the Risk Management team are:coordinating the second line of defence through specific governance,implementing risk appetite on all risks consistently with the Group
172、s risk appetite,with strengthened reporting,risk limits and decision processes,performing a second opinion on key processes,such as reserving,asset-liability management(ALM)studies&asset allocation,and reinsurance strategy,coordinating checks of profitability and capital adequacy of retentions with
173、the Retention Approval Process(“RetAP”).AXA SAs Chief Risk Officer,who is also the Group Chief Risk Officer,heads AXA SAs Risk Management team and reports to the CEO of the Company.The Chief Risk Officer is independent from operations and Internal Audit Departments.AXA SAs Chief Risk Officer reports
174、 regularly to the Board of Directors on risk management matters.The Risk Management team is responsible for controlling and managing risks within Group and Company policies and limits,validating investment or underwriting decisions through Risk Committees and participation to the Underwriting commit
175、tees and Investment and ALM committees.Other functions Management and staff are responsible for day-to-day risk management and decision making and therefore have primary responsibility for establishing and maintaining an effective control environment(first line of defense).The Compliance and Risk Ma
176、nagement(including Internal Control)Departments are responsible for developing,facilitating and monitoring an effective risk and control framework and strategy(second line of defense).AXA SA Solvency and Financial Condition Report 2022 29 AXA SA SFCR 2022 Internal Audit performs,as part of its role,
177、an assessment of risks and governance processes on a periodic basis to provide independent opinion on the effectiveness of the system of internal control(third line of defense).Risk governance within the Company A description of the AXA Groups governance and risk management organization,which also a
178、pplies to a certain extent to the Company,is incorporated herein by reference to Section 5.2,paragraph“Governance and Risk Management organization”on pages 256 to 263 of AXAs 2022 Universal Registration Document.However,following its transformation into a licensed reinsurer and in order to efficient
179、ly manage local and global risks,AXA SA also set up a dedicated governance comprised of an Executive Committee as well as a Risk Committee and an Investment and Asset Liability Management Committee,which come in addition to the AXA Group governance,including the Group Audit Risk and Compliance Commi
180、ttee(ARCC)which also deals with matters specific to AXA SA,such as validating AXA SAs Solvency II reports before submission to AXAs Board of Directors.The Executive Committee is an internal management body of the Company chaired by the Deputy Group Chief Executive Officer(Directeur Gnral Adjoint)in
181、charge of Finance,Risk Management,Strategy,ceded Reinsurance and Operations with the purpose of reviewing in particular all material finance,reinsurance,underwriting,investment and risk issues faced by the Company.It notably reviews any material matters related to the Companys reinsurance activities
182、,asset and liabilities management,such as AXA SAs strategic asset allocation,outsourcing arrangements and risk management.The Chairman of the Executive Committee reports back to the Group Chief Executive Officer on a regular basis concerning material decisions made and issues considered by the Execu
183、tive Committee.Reporting to the Executive Committee,the following Committees cover the following main risk categories:The AXA SA Risk Committee oversees the company governance and management frameworks related to key risks and compliance activities of the Company,including risk identification,assess
184、ment,monitoring,management and reporting.It also defines the Companys appetite for risks in terms of impact on its key financial indicators.The Companys Risk Appetite and overall tolerance limits are then set by the Board of Directors,following the review of its Finance&Risk Committee,after being en
185、dorsed by the Group ARCC and based on the recommendation from the Companys Executive Management.For further information on the role of the Companys Board of Directors and Committees,please refer to Section 3.1“Corporate governance”on pages 94 to 125 of AXA Groups 2022 Universal Registration Document
186、.A report on the Companys key risk indicators is presented on a regular basis to the Risk Committee,the Group ARCC and to the Finance and Risk Committee of the Board.The overall risk framework,including Operational and Emerging risks,is governed by the Risk Committee,chaired by the AXA SAs CRO.Membe
187、rs of the Risk Committee are members or permanent attendees of the Executive Committee,including AXA SAs CFO,and senior executives reporting to the CFO or the CRO.The decision process relating to the management of financial risks is governed by the Investment and Asset&Liability Management Committee
188、.This committee is primarily responsible for the management of Assets&Liabilities.This Committee approves the strategic asset allocation.It also defines the implementation of investment strategy,including hedging programs if any,steers tactical asset allocation,evaluates new investment opportunities
189、,in accordance with the investment policy,and monitors the Companys investment performance as well as financial risk exposures.It specifically includes AXA SAs CFO,the Head of Group Corporate Finance and Treasury Department,AXA SAs CRO,as well as AXA SAs Chief Investment Officer(CIO)who is also the
190、Group CIO.AXA SA Solvency and Financial Condition Report 2022 30 AXA SA SFCR 2022/Own Risk and Solvency Assessment A description of the ORSA that applies to the Company is incorporated herein by reference to Section 5.2“Internal Control and Risk Management”on page 264 of AXAs 2022 Universal Registra
191、tion Document.AXA SA Solvency and Financial Condition Report 2022 31 AXA SA SFCR 2022 B.4 Internal control system A description of the Groups internal control system that applies to the Company is incorporated herein by reference to Section 5.2“Internal Control and Risk Management”on pages 255 to 26
192、3 of AXAs 2022 Universal Registration Document.B.5 Internal audit function A description of the Groups internal audit function that applies to the Company is incorporated herein by reference to Section 5.2,paragraph“Governance and Risk Management Organization-Third line of defense:Group Internal Aud
193、it function”on page 260 of AXAs 2022 Universal Registration Document.B.6 Actuarial function To comply with Solvency II regulation,an effective Actuarial Function has been set up with the specific role of performing the following tasks:Monitoring and maintaining the Actuarial Function Note Coordinati
194、ng the calculation of technical provisions Implementing reviews to determine and validate appropriate reserves Ensuring the appropriateness of the methodologies,underlying models and assumptions made in the calculation of technical provision in accordance with the requirements set out by AXA Group A
195、ssessing the sufficiency and quality of data used in the calculation of technical provisions Informing the Administrative,Management or Supervisory Body of the reliability and adequacy of the calculation of technical provisions Contributing to the effective implementation of the risk-management syst
196、em Coordinating the production of the Actuarial Function Report Presenting and distributing the Actuarial Function Report to Committees,Board and Group AFH Expressing an opinion on the Underwriting&reinsurance Policies and the Reserving Policy AXA SAs Actuarial Function Holder(“AFH”)is a member of A
197、XA SA Risk Committee and a permanent invitee of the AXA SA Executive Committee.The Actuarial Function is carried out by persons who:have the knowledge of actuarial and financial topics,commensurate with the nature,scale and complexity of the risks inherent to the business of the insurance or reinsur
198、ance undertaking(fit).are able to demonstrate their relevant experience with applicable professional and other standards(proper).AXA SA Solvency and Financial Condition Report 2022 32 AXA SA SFCR 2022 B.7 Outsourcing Outsourcing is defined as any service agreement between a legal entity(the Company)
199、and a third party under which the provider performs a procedure,service or activity on behalf of the Company The regulatory framework for insurance in Europe,and in particular the Solvency II directive,imposes a certain number of obligations on insurers in terms of obligations for insurers with resp
200、ect to the use of subcontractors,including:each institution remains responsible for the activity it subcontracts and for its control,subcontracting may not interfere with the control of regulators,insurers must demonstrate that their outsourced activities remain under their control,they must inform
201、the supervisory authorities in advance and in good time of their intention to outsource activities or functions,as well as any subsequent significant developments in these functions or activities concerning these functions or activities,and provide a framework for their practices in the form of a fo
202、rmal outsourcing policy.Based on a self-assessment conducted at the end of fiscal year 2022,the most significant activities outsourced by the Company,mainly for its holding activities,relate to:IT maintenance services,mainly with companies affiliated with the AXA Group,in France,asset management ser
203、vices for AXA Investment Managers,in France,bank of the Company for(i)the management of the accounts of the holders of the securities which are registered in the accounts in the registered form and(ii)centralizing institution mandated by the Company for the organization of the AXA Shareholders Meeti
204、ng(“AG”),in France,the management of financial operations portfolio of the Company,in France,derivatives dealing services,in France,market data reporting,training and support,in the UK,The most significant activities outsourced for its reinsurance activities are operated externally for supporting th
205、e reinsurance placement and related services from selected brokers,in France and in the UK.The support from brokers relates to:arrangement and administration of the reinsurance placements on the market and,all reinsurance related services on a global basis,including but not limited to treaty design,
206、strategic advices,pricing,risk advisory,advice on wordings,opinion on renewal data,benchmarks,internal cost allocation advice,market intelligence,audit support,trainings,reinsurance security information.From time to time,the Company enters into GIEs with certain of its subsidiaries.GIEs are intercom
207、pany partnerships,governed by French law,created to perform various common services for their members and to allocate associated costs and expenses among their members.The GIEs of which the Company was a member during 2022 covered a variety of common services including services performed by the Grou
208、ps central functions(GIE AXA)for the benefit of AXA Group companies(e.g.finance,accounting and reporting,tax,legal,internal audit,human resources,information systems,risk management,cash management).The Company uses the resources of the GIE AXA,which provides all the resources for the operation of t
209、he Company(for both the holding and the reinsurance activities),more precisely for the four key functions described in Section B.2.of this report,who are administratively attached to GIE AXA.AXA SA Solvency and Financial Condition Report 2022 33 AXA SA SFCR 2022 B.8 Any other information Not applica
210、ble.AXA SA Solvency and Financial Condition Report 2022 34 AXA SA SFCR 2022 C.RISK PROFILE Foreword Solvency II Capital Position C.1 Underwriting Risk Insurance Risk Exposure Risk Control and Risk Mitigation C.2 Market Risk Market Risk Exposure Risk Control and Risk Mitigation C.3 Credit Risk Credit
211、 Risk Exposure Risk Control and Risk Mitigation C.4 Liquidity Risk C.5 Operational Risk General principles C.6 Other material Risks Strategic Risk Reputation Risk Emerging Risks C.7 Any other information AXA SA Solvency and Financial Condition Report 2022 35 AXA SA SFCR 2022/Foreword This section de
212、scribes the main risks that the Company is exposed to through its activities and business.As the holding company of the AXA Group,the Company carries on its balance sheet and manages the investments in the Groups subsidiaries.The Company is responsible for M&A operations,external financing(debt issu
213、ance and reimbursement,dividends)and hedging activities for AXA Group.These activities expose the Company to financial risks.As a reinsurance company,the Company provides reinsurance protection to AXAs cedants for their individual or group clients ranging from the protection of their properties and
214、liabilities to their personal and business needs.The Company collects reinsurance premiums from AXAs cedants and invests the collected premiums for the period between collection and claim generating events.The Company offers a broad range of reinsurance products:proportional and non-proportional tre
215、aties,per event and per risk on risk attaching and loss occurring basis.The Company is mainly exposed to catastrophe and atypical risks from P&C,Life&Health lines of business.AXA SAs expertise lies in its ability to assess,mutualise and/or transfer individual or business risk.In this context,The Com
216、pany has developed consistent and comprehensive tools to measure and control its main risks as detailed in the below sections./Solvency II Capital Position Solvency II Capital Requirement The Solvency II regime introduces a risk-based capital requirement which can be assessed either using an interna
217、l model or a standard formula.Since AXA SA obtained its reinsurance licence in 2022,the Company calculates its solvency capital requirements on a solo basis with the Solvency II Standard Formula.The table below details the Solvency Capital requirement at AXA SA level and per risk category,based on t
218、he Standard Formula,at FY21 and FY22 EUR mFY 2021FY 2022Difference%Difference absMarket risk21 681 22 522 +4%+841 P&C risk1 756 1 893 +8%+136 Counterparty default risk681 811 +19%+130 Life risk318 332 +4%+14 Health risk41 53 +27%+11 BSCR before adjustments22 475 23 411 +4%+936 Deferred Tax absorptio
219、n-76 -698 -822%-622 BSCR after adjustments22 399 22 713 +1%+313 Operational Risk193 249 +29%+56 SCR Total22 592 22 961 +2%+369 EOF54 609 58 317 +7%+3 708 Coverage Ratio242%254%+12 pcpAXA SA Solvency and Financial Condition Report 2022 36 AXA SA SFCR 2022 The FY21 figures corresponds to the proforma
220、figures calculated as if AXA SA and AXA Global Re merged on Jan 1,2022,and as if the P&C quota-shares reinsurance treaties implemented in 2022 had been signed before year-end 2021.AXA SA Solvency and Financial Condition Report 2022 37 AXA SA SFCR 2022 C.1 Underwriting Risk /Insurance Risk Exposure T
221、he Company is responsible for managing its insurance risks linked to underwriting,pricing and reserving,as well as for taking appropriate actions in response to changes in insurance cycles and to political and economic environments in which it operates.the Company underwrites Property&Casualty(P&C)a
222、nd Life businesses,and thus,as described in section A1(3)of this report,is exposed to P&C,Health and Life risks.Main P&C risks are:P&C underwriting risk is the risk inherent to the transfer of risk operated by the reinsurance contracts ceded by AXA entities and underwritten by the Company.Through th
223、ose contracts,the Company assumes peak and aggregated exposures.The main peak risks are damages to large commercial and industrial sites as well as the liability issues encountered by the insured.Aggregated exposures mainly arise from the impact of natural events,as well as from the attritional loss
224、es from Quota shares covering the net businesses of P&C entities.Besides the risk of deviation of claims experience,AXA SA is also exposed to lapse risk,that is a decrease in turnover of its cedants,mostly on Quota-shares,since a decrease in the local turnovers may decrease the expected technical re
225、sult of these treaties.P&C reserving risk is the risk of adverse development of claims reserves.The initial reserving of claims may have to be increased when the ultimate cost of compensation is revised.For capital requirements calculation,the P&C underwriting risks are split between Premium risks,C
226、atastrophe risks,and Lapse risks.Main life risks are:Catastrophe risk:risk of loss,or of adverse change in the value of liabilities,resulting from the significant uncertainty of pricing assumptions related to extreme or irregular events,in particular through CAT treaties,Disability risk:risk of loss
227、,or of adverse change in the value of liabilities,resulting from changes in the level,trend or volatility of disability,sickness and morbidity rates,and in associated medical expenses And to a lesser extent to:o Lapses and Mass lapses risks:risks of loss,or of adverse change in the value of liabilit
228、ies,from changes in the level or volatility of lapse rates,terminations,renewals and surrenders,o Expenses risk:risks of adverse expense development in servicing reinsurance contracts,o Mortality risk:risk of loss,or of adverse change in the value of liabilities,from changes in level,trend,or volati
229、lity of mortality rates,where an increase in the mortality rate leads to an increase in the value of insurance liabilities,o Longevity risk:risk of loss,or of adverse change in the value of liabilities,from changes in level,trend,or volatility of mortality rates,where a decrease in the mortality rat
230、e leads to an increase in the value of insurance liabilities,o Revision risk:risk of adverse change on annuities due either to changes in the legal environment or to changes in the state of health of insured.AXA SA Solvency and Financial Condition Report 2022 38 AXA SA SFCR 2022 Health risks are sma
231、ll and similar to P&C risks for capital requirements calculation.AXA SAs overall exposure to underwriting risks is covered by AXA Solvency Capital Requirement metric,as detailed in the above Section“Solvency II capital position”,and taken into account in AXA liquidity risk management framework(see S
232、ection C4)./Risk Control and Risk Mitigation Insurance risks for P&C and Life(re)insurance business are covered through 4 major processes,defined at Group level but performed jointly by central and local teams:Risk controls on new treaties that complement underwriting rules and profitability analyse
233、s(Product Approval Process):this process is of limited relevance to AXA SA as there is no product launch as such in reinsurance.The Company has developed a proper alternative process called“Retention Approval process”through which the profitability of the retentions is tested at a relevant segmentat
234、ion level,as well as the respect of Risk Appetite constraints is checked,Optimizing ceded reinsurance strategies in order to limit the peak exposures of the Company by protecting its solvency by reducing volatility:this process is included in the“Retention Approval Process”,Reviewing technical reser
235、ves including a roll forward analysis,Monitoring emerging risks to share expertise within the underwriting and risk communities.A description of the Product Approval,Exposure Analysis,Ceded Reinsurance,and Technical Reserves that apply to the Company is incorporated herein by reference to Section 5.
236、6“Insurance risks”-sub-section“Risk control and risk mitigation”on pages 282 to 284 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 39 AXA SA SFCR 2022 C.2 Market Risk /Market Risk Exposure The Company is exposed to financial market risks through the
237、financing of its activities as part of its equity and debt management and through its core business of reinsurance.Market risks arise from a variety of factors including:A decline in asset market value(participations,real estate,etc.)can adversely impact the solvency margin,as well as the available
238、surplus,A deterioration in foreign-exchange rates has a negative effect on the valuation of participations in foreign currencies,and can adversely impact the solvency margin,A reduction of interest rates increases holding debts and the value of reinsurance liabilities,and can adversely impact the so
239、lvency margin,A rise in spreads of fixed-income investments reduces their market value and can adversely impact the solvency margin AXA SA regularly monitors its interest rate and exchange rate hedging strategies and will continue to review its effectiveness and the potential need to adapt it.AXA SA
240、s overall exposure to market risks is covered by AXA Solvency Capital Requirement metric,as detailed in the previous Section“Solvency II capital position”and considered in AXA liquidity risk management framework(see Section C4)./Risk Control and Risk Mitigation The Company is responsible for managin
241、g its financial risks(market risk,credit risk,liquidity risk),while abiding by the risk appetite framework defined at local and Group levels,in terms of limits and standards.This approach aims to reacting swiftly in an accurate and targeted manner to changes in financial markets,political and econom
242、ic environments in which the Company operates.A wide variety of risk management techniques are used to control and mitigate the market risks the Company is exposed to.These techniques include:Hedging of financial risks when they exceed the tolerance levels set by the Company or the Group.Derivatives
243、 operational management is based on stringent rules and performed by the Company,Asset Liability Management(ALM),i.e.defining an optimal strategic asset allocation with respect to the liabilities structure,to reduce the risk to a desired level,A disciplined investment process,leveraging on Group Inv
244、estment Approval Process documents when available or thorough analyses provided by Asset managers for any sophisticated investment,and a second opinion by Risk Management,A regular monitoring of financial risks on the economic and solvency position of the Company,Reinsurance which also offers soluti
245、ons to mitigating certain financial risks.A description of the AXA Investment strategy and Asset&Liability Management(ALM)that apply to the Company is incorporated herein by reference to Section 5.2“Internal Control and Risk Management”-sub-section“Governance of investment strategy and Asset&Liabili
246、ty Management(ALM)”on pages 267 to 268,and Section 5.3“Market risks”-sub-section“Risk control and risk mitigation”on page 270 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 40 AXA SA SFCR 2022 C.3 Credit Risk /Credit Risk Exposure Counterparty credit
247、 risk is defined as the risk that a third party in a transaction will default on its commitments.Given the nature of its core business activities,the Company monitors all types of counterparties,using methods suitable to each type:Cash and Cash equivalent related to holding and reinsurance activitie
248、s Derivatives counterparty for hedging strategies,Investment portfolios,Ceded risks to reinsurers resulting from reinsurance externally ceded by the Company.If the Company retrocedes a significant portion of its risks externally,this counterparty risk is managed and reduced by the stringent reinsure
249、rs selection policy of the Company,Receivables deriving from direct reinsurance operations,including cedants and brokers AXA SAs overall exposure to credit risks is covered by AXA Solvency Capital Requirement metric,as detailed in the previous Section“Solvency II capital position”and taken into acco
250、unt in AXA liquidity risk management framework(see Section C4)./Risk Control and Risk Mitigation A description of Invested assets:a central monitoring of counterparty exposure,Credit derivatives,Counterparty risk arising from over-the-counter(OTC)derivatives,Receivables from reinsurers:rating proces
251、ses and factors,Credit exposure stemming from insurance and assumed reinsurance businesses that apply to the Company is incorporated herein by reference to Section 5.4“Credit risks”-sub-section“Risk control and risk mitigation”on pages 276 to 279 of AXAs 2022 Universal Registration Document.AXA SA S
252、olvency and Financial Condition Report 2022 41 AXA SA SFCR 2022 C.4 Liquidity Risk The liquidity risk is the uncertainty,emanating from business operations,investments or financing activities,over whether the Company and/or an AXA entity will have the ability to meet payment obligations in a full an
253、d timely manner,in current or stressed environments.Liquidity risk concerns assets and liabilities as well as their interplay.Liquidity is a key dimension of the Risk Appetite Framework allowing the AXA Group to ensure that both AXA SA and the local entities have at all times sufficient liquidity bu
254、ffer to withstand a severe shock.The objective is achieved through the monitoring of the liquidity adequacy across the AXA Group on the basis of a metric called“Excess Liquidity”,i.e.the difference between liquidity resources and liquidity needs calculated under severe stress conditions and over dif
255、ferent time horizons:1 week,1 month,3 months and 12 months.For each time horizon,the post-stress liquidity resources available and the post-stress liquidity needs( outflows)to be paid are projected to measure the excess liquidity.The stressed conditions are calibrated so as to reflect extreme circum
256、stances(e.g.distressed financial markets,confidence crisis towards the Group,natural catastrophes).The approach is prudent as it is assumed that all events occur simultaneously.As a holding company of the AXA Group,the Company includes the potentially required support to local entities in distress o
257、f liquidity or solvency post-stress in its liquidity needs.A description of liquidity management and liquidity risk management,that apply to the Company is incorporated herein by reference to Section 2.4“Liquidity and Capital Resources”on pages 85 to 90,Section 5.1“Risk factors Financial risks Credi
258、t and liquidity-related risks”on pages 235 to 236 of AXAs 2022 Universal Registration Document.AXA SA Solvency and Financial Condition Report 2022 42 AXA SA SFCR 2022 C.5 Operational Risk AXA has defined a framework to identify and measure its operational risks that may arise from a failure in its o
259、rganization,systems and resources or from external events.Ensuring an adequate mitigation of these risks across the Group is a key pillar of the Risk Management functions./General Principles One objective of AXA SAs operational risk framework is to understand and reduce losses resulting from operati
260、onal failures and to define an appropriate risk response strategy for major Operational risk scenarios.Based on the Solvency II definition,the Company defines operational risk as the risk of loss arising from inadequate or failed internal processes,personnel or systems or from external events.Operat
261、ional risk includes legal risks and excludes risks arising from strategic decisions,as well as reputation risks.Reputation is however considered as an impact when assessing each operational risk.AXA has defined a single Group framework for identifying,quantifying and monitoring the main operational
262、risks,involving the deployment of a common system,dedicated operational risk teams and a common operational risk typology classifying operational risks into seven risk categories:internal fraud,external fraud,employment practices and workplace safety,clients,business practices,damages to physical as
263、sets,business disruption and system failures,and execution,delivery and process management.Both quantitative and qualitative requirements are defined.The most critical operational risks of the Company and a set of stress scenarios are identified and assessed following a forward-looking and expert-op
264、inion approach.These risk scenarios are then used to estimate the capital requirement needed to cover operational risks based on advanced models2 based on Solvency II principles.The operational risk management process is embedded into local governance through senior management validation to ensure t
265、he adequacy,appropriateness and comprehensiveness of the risk assessment but also to ensure that adequate corrective and pre-emptive actions are defined and implemented in front of the main risks,In addition,a loss data collection process is in place within AXA SA in order to track and appropriately
266、 mitigate actual operational risk losses.This process is also used as a valuable source of information to back-test the assumptions taken in risk assessments.In 2022,AXA SAs Operational Risk Profile is reasonably well spread out with all seven operational risk categories(listed above)with the main r
267、isks related to the execution,delivery and process management,client&business practices(with compliance risk)as well as external fraud(with cyber risk).AXA SAs overall exposure to operational risks is covered by AXA Solvency Capital Requirement metric,as detailed in the above Section“Solvency II cap
268、ital position”and taken into account in AXA liquidity risk management framework(see Section C4).2 As of December 31,2022,the Company used the Standard Formula to calculate its Solvency Capital Requirement,and did not rely on these advanced models for operational risks.AXA SA Solvency and Financial C
269、ondition Report 2022 43 AXA SA SFCR 2022 C.6 Other material Risks/Strategic Risk A strategic risk is the risk that a negative impact(current or prospective)on earnings or capital,material at the Group level,arises from(a)a lack of responsiveness to industry changes or consumers needs evolution,or(b)
270、adverse business decisions.Given the nature of strategic risks,there is no capital charge assessment required by the legislator but rather a risk management framework in place in order to assess,anticipate and mitigate these risks.A description of strategic risk management,that applies to the Compan
271、y is incorporated herein by reference to Section 5.8“Other material risks”-sub-section“Strategic risks”on page 286 of AXAs 2022 Universal Registration Document./Reputation Risk Reputation risk is the risk that an event,internal or external,will negatively influence stakeholders perceptions of the Co
272、mpany or where there is a gap between stakeholders expectation and the Companys behaviors,attitudes,values,actions,or inactions.Given the nature of reputation risks,there is no capital charge assessment required by the legislator but rather a risk management framework in place in order to assess,ant
273、icipate and mitigate these risks.A description of reputation risk management,that applies to the Company is incorporated herein by reference to Section 5.8“Other material risks”-sub-section“Reputation risks”on page 286 of AXAs 2022 Universal Registration Document./Emerging Risks Emerging risks are r
274、isks which may develop or which already exist and are continuously evolving.Emerging risks are marked by a high degree of uncertainty as some of them may never emerge.Given the nature of emerging risks,there is no capital charge assessment required by the legislator but rather a risk management fram
275、ework in place in order to assess,anticipate and mitigate these risks.A description of emerging risk management,that applies to the Company is incorporated herein by reference to Section 5.8“Other material risks”-sub-section“Emerging risks”on page 287 of AXAs 2022 Universal Registration Document.C.7
276、 Any other information Not applicable AXA SA Solvency and Financial Condition Report 2022 44 AXA SA SFCR 2022 D.VALUATION FOR SOLVENCY PURPOSES Basis for preparation D.1 Assets Fair Value Measurement Intangible Assets Deferred taxes Property,Plant&Equipment held for own use Investments and loans Der
277、ivative instruments Reinsurance Recoverables Leasing arrangements Assets held for index-linked and unit-linked funds Own shares Unrealized foreign exchange gains/losses Other assets D.2 Technical provisions General principles Best Estimate Liabilities Statement on the use of the volatility adjustmen
278、t Statement on the use of the transitional measures for technical provisions Risk Margin Reinsurance Recoveries Material changes in assumptions in 2022 D.3 Other liabilities Contingent liabilities Provisions other than technical provisions Pension benefit obligations Deferred taxes Financial liabili
279、ties Payables and deposits from reinsurers Other liabilities D.4 Alternative methods for valuation D.5 Any other information AXA SA Solvency and Financial Condition Report 2022 45 AXA SA SFCR 2022 Basis for preparation AXA SAs Solvency II balance sheet is prepared as of December 31,2022,in complianc
280、e with the Solvency II Regulations.Assets and liabilities are valued based on the assumption that the Company will pursue its business as a going concern.AXA SAs holdings in subsidiary undertakings are derived from AXA SAs ownership in the subsidiaries excess of assets over liabilities.For Solvency
281、II purpose,the Company does not value its subsidiaries with a market approach at an amount that would be an approximation of a potential value for an external buyer,but at an amount equal to the excess of assets of the subsidiary over its liabilities,these being determined in accordance with Solvenc
282、y II rules.Technical provisions are recognized with respect to all reinsurance obligations to policyholders and beneficiaries of reinsurance contracts.The value of technical provisions corresponds to the current amount that the Company would have to pay if it was to transfer its reinsurance obligati
283、ons immediately to another reinsurance undertaking.Other assets and liabilities are recognized in compliance with IFRS standards and interpretations of the IFRS Interpretations Committee that were endorsed by the European Union before the balance sheet date with a compulsory date of January 1,2022,p
284、rovided that those standards and interpretations include valuation methods that are in accordance with the following market consistent valuation approach set out in Article 75 of the Solvency II Directive 2009/138/EC:Assets shall be valued at the amount for which they could be exchanged between know
285、ledgeable willing parties in an arms length transaction,Liabilities shall be valued at the amount for which they could be transferred,or settled,between knowledgeable willing parties in an arms length transaction(without adjustment to take account of the Company own credit standing).The main adjustm
286、ents between local statutory GAAP and Solvency II assets and liabilities relate to:The re-measurement of consolidated subsidiaries and participating interests,The re-measurement of the market value of assets,related to the recognition of unrealized gain and losses of assets,recognized at cost in the
287、 statutory Balance Sheet,The re-measurement in the Solvency II framework of technical reserves as compared to those of the Statutory Balance Sheet,for both liabilities(accepted reinsurance)and assets(ceded reinsurance),The recognition of Risk Margin(RM),The re-measurement of certain assets,carried a
288、t cost in the statutory balance sheet,The re-measurement at fair value of internal debts and loans with regulated entities under Solvency II framework,The re-measurement at fair value of external financial liabilities(excluding subordinated debt)as per Article 14 of the Solvency II Delegated Acts Th
289、e re-measurement of assets and liabilities other than technical reserves related to reinsurance activities,The recognition of contingent liabilities in the balance sheet,where applicable,The removal of the own shares recorded in the statutory balance sheet,The removal of translation differences reco
290、rded in the statutory balance sheet,The removal of foreseeable dividends and share buyback programs in the reconciliation reserves,The tax impact of the above restatements.AXA SA Solvency and Financial Condition Report 2022 46 AXA SA SFCR 2022 Other adjustments come from the removal of intangibles a
291、nd prepaid assets(recorded in other assets)or the reclassification of subordinated debts as equity within the Solvency II balance-sheet.These adjustments are detailed hereafter in this section.The preparation of the Solvency II balance sheet requires the use of estimates and assumptions.It requires
292、a degree of judgment in the application of Solvency II principles.The main balance sheet captions concerned are assets accounted at fair value,deferred tax assets,assets and liabilities relating to the reinsurance business,pension benefit obligations and balances related to share-based compensation.
293、The principles set out below specify the measurement methods used for these items.Unless otherwise stated,AXA SAs valuation principles were consistently applied to all the periods presented.The Solvency II balance sheet is presented in Euro,Euro being the Companys presentational currency.Assets and
294、liabilities resulting from transactions denominated in foreign currencies are translated at the closing exchange rate.AXA SA Solvency and Financial Condition Report 2022 47 AXA SA SFCR 2022 D.1-Assets /Fair Value Measurement The table below summarizes,for each material class of assets,the value of t
295、he assets of the Company according to Solvency II provisions together with the values of the assets recognized and valued on a statutory accounting basis as of December 31,2022:(in Euro million)Fair Value Carrying Value3%(Solvency II)(Local GAAP)(value Balance Sheet S2)Goodwill-Deferred acquisition
296、costs-Intangible assets-319 0%Deferred tax assets-0%Pension benefit surplus-Property,plant&equipment held for own use 1 1 0%Investments(other than assets held for index-linked and unit-linked contracts)79,120 69,609 84%Investment in real estate properties-Holdings in related undertakings,including p
297、articipations 75,359 65,748 80%Equities 650 654 1%Debt Instruments 2,736 2,869 3%Investment funds 294 273 0%Derivatives 81 65 0%Other investments-Assets held for index-linked and unit-linked contracts-Loans and mortgages 411 436 0%Reinsurance recoverable 4,727 5,576 5%Deposits to cedants 1,659 1,852
298、 2%Receivables 2,514 2,694 3%Cash and cash equivalents 3,030 3,030 3%Own shares(held directly)2,347 2,024 2%other assets,not elsewhere shown 703 4,403 1%Total Assets 94,514 89,944 100%The Company applies the IFRS 13 fair value hierarchy as described below for all assets and liabilities(excluding tec
299、hnical provisions).This fair value hierarchy is consistent with the one defined in the Solvency II regulation.3 The total Assets in carrying value is given in this table for comparison with the Solvency II fair value,after reformatting the presentation of certain positions(deposits and receivables v
300、is-vis the tax group or tax liabilities vis-vis the State for its holding activities,as well as accrued interest not yet due on bonds)for asset/liability mismatching purposes in relation to the total Assets presented in Appendix III,page 484,of AXAs 2022 Universal Registration Document AXA SA Solven
301、cy and Financial Condition Report 2022 48 AXA SA SFCR 2022 Active market:quoted price Fair values of assets and liabilities traded on active markets are determined using quoted market prices when available.An instrument is regarded as quoted in an active market if quoted prices are readily and regul
302、arly available from an exchange,dealer,broker,industry group,pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arms length basis between a willing seller and a willing buyer.For financial instruments traded in active markets,quot
303、es received from external pricing services represent consensus prices,i.e.using similar models and inputs resulting in a very limited dispersion.Active versus inactive markets financial instruments Equity instruments quoted on exchange traded markets and bonds actively traded on liquid markets for w
304、hich prices are regularly provided by external pricing services that represent consensus with limited dispersion and for which quotes are readily available are generally considered as being quoted in an active market.Liquidity may be defined as the possibility to sell or dispose of the asset in the
305、ordinary course of business within a certain limited time period at approximately the price at which the investment is valued.Liquidity for debt instruments is assessed using a multi criteria approach including the number of quotes available,the place of issuance and the evolution of the widening of
306、 bid ask spreads.A financial instrument is regarded as not quoted in an active market if there is little observation of transaction prices as an inherent characteristic of the instrument,when there is a significant decline in the volume and level of trading activity,in case of significant illiquidit
307、y or if observable prices cannot be considered as representing fair value because of dislocated market conditions.Characteristics of inactive markets can therefore be very different in nature,inherent to the instrument or indicative of a change in the conditions prevailing in certain markets.Assets
308、and liabilities not quoted in an active market The fair values of assets and liabilities that are not traded in an active market are estimated:Using external and independent pricing services;or Using valuation techniques No active market:use of external pricing services External pricing services may
309、 be fund asset managers in the case of investments in funds.To the extent possible,the Company collects quotes from external pricing providers as inputs to measure fair value.Prices received may form tight clusters or dispersed quotes which may then lead to the use of valuation techniques.The disper
310、sion of quotes received may be an indication of the large range of assumptions used by external pricing providers given the limited number of transactions to be observed or reflect the existence of distress transactions.In addition,given current market conditions since the financial crisis and the p
311、ersistency of complete inactivity of some markets since then,many financial institutions closed their desks dedicated to structured asset deals and are no longer able to delivery meaningful quotes.No active market:use of valuation techniques The objective of valuation techniques is to define a price
312、 at which an orderly transaction would take place between market participants(a willing buyer and a willing seller)at the measurement date.Valuation technique models include:Market approach:The consideration of recent prices and other relevant information generated by market transactions involving s
313、ubstantially similar assets or liabilities.Income approach:Use of discounted cash flow methods,option pricing models,and other present value techniques to convert future amounts to a single current(i.e.discounted)amount.AXA SA Solvency and Financial Condition Report 2022 49 AXA SA SFCR 2022 Cost app
314、roach:The consideration of amounts that would currently be required to construct or replace the service capacity of an asset.Valuation techniques are subjective in nature and significant judgment is involved in establishing fair values.They include recent arms length transactions between knowledgeab
315、le willing parties on similar assets if available and representative of fair value,and involve various assumptions regarding the underlying price,yield curve,correlations,volatility,default rates and other factors.Unlisted equity instruments are based on cross checks using different methodologies su
316、ch as discounted cash flows techniques,price earnings ratios,adjusted net asset values,taking into account recent transactions on instruments which are substantially the same if concluded at arms length between knowledgeable willing parties,if any.The use of valuation techniques and assumptions coul
317、d produce different estimates of fair value.However,valuations are determined using generally accepted models(discounted cash flows,Black&Scholes models,etc.)based on quoted market prices for similar instruments or underlying factors(index,credit spread,etc.)whenever such directly observable data ar
318、e available and valuations are adjusted for liquidity and credit risk.Valuation techniques may be used when there is little observation of transaction prices as an inherent characteristic of the market,when quotes made available by external pricing providers are too dispersed or when market conditio
319、ns are so dislocated that observed data cannot be used or need significant adjustments.Internal mark-to-model valuations are therefore normal market practices for certain assets and liabilities scarcely traded or for exceptional processes implemented due to specific market conditions.The dislocation
320、 of certain markets may be evidenced by various factors,such as very large widening of bid ask spreads which may be helpful indicators in understanding whether market participants are willing to transact,wide dispersion in the prices of the small number of current transactions,varying prices over ti
321、me or among market participants,inexistence of secondary markets,disappearance of primary markets,closing down of dedicated desks in financial institutions,distress and forced transactions motivated by strong needs of liquidity or other difficult financial conditions implying the necessity to dispos
322、e of assets immediately with insufficient time to market the assets to be sold,and large bulk sales to exit such markets at all costs and that may involve side arrangements(such as sellers providing financing for a sale to a buyer).Primary transactions prices in markets supported by government throu
323、gh specific measures following the financial crisis do not represent fair value.In such cases,the Company uses valuation techniques including observable data whenever possible and relevant,adjusted if needed to develop the best estimate of fair value,including adequate risk premiums or develops a va
324、luation model based on unobservable data representing estimates of assumptions that willing market participants would use when prices are not current,relevant or available without undue costs and efforts:in inactive markets,transactions may be inputs when measuring fair value,but would likely not be
325、 determinative and unobservable data may be more appropriate than observable inputs./Intangible Assets In Solvency II,only intangible assets related to the business in force,that are separable and for which there is evidence of exchange transactions for same or similar assets,indicating they are sal
326、eable in the marketplace,are recognized.That notably includes software developed for internal use.It is booked at fair value with therefore possible differences with the local statutory GAAP carrying values,based on cost less amortization over the assets estimated useful lives.As a result of Solvenc
327、y II principles,deferred acquisition costs and other intangible assets,as well as prepaid assets recorded in other assets,and recognized under local statutory GAAP,have no value on the Solvency II balance sheet.AXA SA Solvency and Financial Condition Report 2022 50 AXA SA SFCR 2022 Intangible assets
328、 include concessions,patents,brands and software and totaled 319 million which mainly included the AXA brand valued at 308 million.The AXA brand value is considered in the statutory Balance Sheet and is removed on the Solvency II balance sheet.No deferred tax asset is associated with the elimination
329、 of the brand as it is a different permanent asset,the brand not being transferable./Deferred taxes in local statutory GAAP,no deferred taxes are recognized.However,in Solvency II,deferred tax assets and liabilities emerge from temporary differences with tax values of assets and liabilities,and,when
330、 applicable,from tax loss carry-forwards.Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available to offset the temporary differences,taking into account the existence of tax groups and any legal or regulatory requirements on the limits(in ter
331、ms of amounts or timing)relating to the carry-forward of unused tax losses or the carry-forward of unused tax credits.The recoverability of deferred tax assets recognized in previous periods is re-assessed at each closing.The measurement of deferred tax liabilities and deferred tax assets reflects t
332、he expected tax impact,at the balance sheet date that would follow the way the Company expects to recover or settle the carrying amount of its assets and liabilities.When income taxes are calculated at a different rate,if dividends are paid,deferred taxes are measured at the tax rate applicable to u
333、ndistributed profits.The income tax consequences of dividends are only accounted when a liability to pay the dividend is recognized.For presentation purpose of the balance sheet,deferred tax assets are offset with deferred tax liabilities at fiscal entity level.As of December 31,2022,a net deferred tax liabilities position of 698 million was recognized on AXA SAs Solo Solvency II Balance Sheet.Det