Axa Outlook Reduced to Negative by Fitch on Lower Rates

“Axa SA (CS), France’s largest insurer, had its outlook lowered by Fitch Ratings to negative asearnings are pressured by bond yields at near-record lows.

The outlook for the Paris-based company was cut from stable on “concerns about the group’s ability to improve profitability, notably in the context of low interest rates,” the ratings firm said yesterday in a statement.

Falling yields for fixed-income securities have hurt insurers’ investment income as proceeds from maturing bonds are reinvested at lower rates. The yield on the 10-year government bond in France has declined to 2.26 percent from about 3.14 percent at the end of last year. The yield on the 10-year U.S. Treasury is at 1.69 percent, down from 1.88 percent.”

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