At the same time, AXA addressed current problems in the U.S. subprime mortgage sector, urging investors not to fret. "Even if there is market turbulence in the short term, one must not panic," said AXA Chief Executive Henri de Castries, calling the situation "not a systemic crisis at the moment. "Company profits are very high and consumer demand remains strong. U.S. growth is slowing down but it is not a recession and economic growth in emerging markets is high," he said.
AXA's results are in contrast to numbers posted by Allianz, Europe's biggest insurer, which last week reported a smaller-than-expected 6 percent fall in second-quarter net profit. However, shares of AXA went from up 3.6 percent on Wednesday to down 4 percent in early afternoon trading as markets fell after an announcement from BNP Paribas, Frances’ largest listed bank, that it had suspended redemptions from three funds due to problems in the U.S. subprime mortgage sector.
Earlier this month, AXA announced that some of its funds had taken losses on investments related to subprime mortgages and that it had injected some of its own money to ensure their liquidity. Nevertheless, AXA said it did not expect the U.S. subprime market conditions to have a material impact on its earnings. A spokesperson for the insurer said, "The current volatility on the credit markets should not have a material impact on our profitability, given the quality of our assets and the long term duration of our insurance liabilities.”