France's AXA (OTCQX:AXAHY)
has never been afraid to do things its own way, and the company's past
efforts to shift away from more capital-intensive savings-oriented life
products in favor of protection-oriented products made it an early mover
in what proved to be a sound strategic shift. More recently, management
has been working to strip administrative costs out of operations, grow
its P&C and health insurance products, shift more capital towards
faster-growing regions like Asia, and begin selling down its U.S.
operations. The biggest move, though, has also been the most
controversial - the $15 billion-plus acquisition of XL Group (XL).
I
don't fault the reasoning for making a large acquisition in P&C
insurance/reinsurance, and I can see the positive leverage opportunities
in acquiring a Bermuda-based reinsurer like XL Group. I'm not sure this
was the right company, though, and I think at least some of the share
price weakness has been a reasonable reaction to those concerns. While
AXA does appear to trade at a double-digit discount to fair value, I'd
just as soon own a company like Prudential plc (PUK) or Aviva (OTCPK:AVVIY) at this point.
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AXA's Accelerated Transformation Carries Bigger Risks
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