The UK arm of French insurance giant AXA has reported 23 per cent growth in under-lying earnings in 2005 to £266 million.

Adjusted earnings - net income before the impact of exceptional operations, good-will and amortisation - increased by 63 per cent against 2004 to £319 million.

In General and Health Insurance, revenues increased on a comparable basis by one per cent to £3,018 million in 2005.

This reflected in particular a strong performance in personal property (up 13 per cent) and growth in commercial property (up two per cent), while revenues decreased in motor (down five per cent) mainly in the competitive Irish market, and in casualty commercial classes (down six per cent).

UK health revenues grew strongly by nine per cent to £824 million in 2005 due to new business gains, higher average premiums and the successful launch of new products.

General and Health Insurance's underlying earnings increased by 33 per cent to £273 million.

This was driven by a strong underwriting performance with the combined ratio down one per cent at 96.3 per cent, well within the AXA Group target range of 96-101 per cent.

In the Life & Savings business, Annual Premium Equivalent was 16 per cent higher at £559 million in 2005. IFA sales improved by 21 per cent to £480 million with investment bonds up 35 per cent and group pensions up 18 per cent. Underlying earnings were maintained at £58 million.

In both divisions the figures include central financing costs.

New business value increased by £14 million to £49 million.

Dennis Holt, AXA UK chief executive said: "In 2005 we have reaped the benefits of investment in the restructure of our UK businesses, successfully growing market s hare through product enhancement and quality customer service.

"In 2006 we continue to focus on profitable growth. To win in a challenging competitive environment, we shall maintain our underwriting discipline, keep a firm control of costs and build on our strong m arket positions in Investment, Life, General and Health Insurance businesses. We shall also continue to deliver improved services that add value for customers by harnessing synergies across our businesses."

Overall, AXA reported a 24 per cent rise in 2005 underlying profit which beat market forecasts and sent its shares to their highest level in more than four years.

Underlying profit rose to 3.258 billion euros (£2.2 billion), with earnings boosted by higher sales of savings prod-ucts and growth in AXA's asset management division.

AXA also said it had a made good start towards meeting long-term earnings goals.

AXA, which along with ING and Allianz is among continental Europe's top three insurers, has benefited from rising stock markets, which have spurred the sales of savings products that often invest in equities.

Full-year net profit rose 12 per cent to 4.173 billion euros (£2.85 billion), above market forecasts, while the company proposed raising its dividend to 0.88 euros.

"AXA's results are at the high end of consensus and the dividend is also higher than expected," a trader at an investment bank said. AXA said total assets under management reached a record level of 1,064 billion euros (£728 billion), with earnings in the division rising 33 per cent.

"The results in its life business were good, and it had outstanding results in asset management," said West LB analyst Andreas Schaefer.

Last year, AXA unveiled a new strategy for the group to triple its earnings by 2012. It had made 'a good start towards meeting this goal'.

"AXA's results show we are off to a good start in meeting these objectives," chief executive Henri de Castries said.