AXA S.A.

Good morning everybody and welcome to AXA's Conference Call on our Activity Indicators for the First Three Months of 2020. I am pleased to welcome Etienne Bouas-Laurent, Group CFO who will be taking you through the highlights of the release covering both the usual activity elements for the first quarter and also the additional disclosures we made in respect of COVID-19.

At the end of his introductory remarks Etienne will be happy to take your questions. Etienne, I hand it over to you.

Thank you, Andrew. Hello and good morning to all.

Thank you for joining the call, starting first with the 1Q activity indicators. As you can see from yesterday's release AXA performed well in the first quarter of 2020 recording a strong revenue growth, plus 4% at the group level and importantly across all our business lines, preferred segments, and geographies.

Let me go rapidly for some of the details. First, revenues in P&C increased by 3% supported by the 5% growth in commercial lines with price increases across the Board.

Notably AXA XL grew by 8% with continued strong price increases for the quarter plus 10% in insurance, and plus 6% in reinsurance. We see price increases continuing into April.

Health revenues grew by 8%, all our countries contributing to this achievement. Additionally life and savings revenues increased by 4%, most notably from Unit-Linked and Protection products.

Finally our asset management segment recorded a strong performance with AXA IM revenues growing by 11% in the first quarter mostly supported by net inflows and positive market impact. Moving now on to the balance sheet, our balance sheet continues to be resilient even in the face of this volatile market conditions.

Our Solvency II ratio was 182% at the end of March, resilient and performing in line with our published sensitivities. Our debt giving is now below 28% on the Pro Forma basis adjusting for the repayment of 1.3 billion sub debt on April 16th.

You would have also noticed that both S&P and Fitch have reaffirmed their ratings on AXA over the past weeks a AA minus with a stable outlook. Let's speak now about COVID-19.

The safety of our employees was and remains our first priority and they have been able to continuously work remotely in order to provide undisturbed services to our clients. As a responsible intro we have also taken several exceptional measures to support our clients and the society at large.

In France for example AXA is the largest private contributor to the state's solidarity fund. In France we have also given two months premium refunds for impacted SMEs and had extended work stoppage insurance coverage for pregnant women and people with chronic disease.

We had as well dedicated firms to help the medical staff and to finance the research against the virus. As I explained before we grew strongly in the first three months of the year.

However, we can expect COVID-19 to have a progressive impact on our revenue growth. We have seen a decline of around 5% in March -- on the like for like basis and initial trends indicated decrease of around minus 12% in April.

We can expect that impacts will be more pronounced in life and savings and to a lesser extent in P&C and in Health. In terms of claims we have seen a limited amount of notifications in relation to COVID-19 at the end of March.

However, we do expect the confinement measures enforced by the different countries to have a material impact on the level of claims for this year, most notably in event cancellation and in business interruption. In event cancellation a preliminary estimate would be around mid triple digit million Euros before tax and not of reinsurance.

For business interruption it is too early to make an estimate at this point. In terms of earnings, while it is too early to provide a guide -- precise guidance on the different impacts, we believe that the overall effect of COVID-19 taking into account revenues, claims, expenses, financial markets, and the cost of exceptional solidarity measures will have an overall material impact on the group's earnings in 2020.

In terms of assets it is important to note that our asset portfolio remains of high quality primarily composed of Gabi's [ph] rated AA on average and corporate bonds rated A on average. As you can see in the additional disclosure in our press release, within our corporate bond portfolio around 90% of our assets are rated at or above BBB with a significant share backing participating products.

We also have limited exposure to the most vulnerable sectors in the current context. To conclude the Group has performed well in the first quarter with 4% growth in revenues supported by all business lines and preferred segments.

Our balance sheet remains resilient in the context of volatile market conditions. While it is too early to give a precise guidance we believe the impact of COVID-19 will be material for the Group's earnings in 2020 as is no doubt the case for the insurance sector as a whole.

Looking forward we are confident in our strategy and its execution and the need enhanced insurance coverage in our preferred segments confirmed our growth potential post-crisis. I'm now ready to take your questions.

Thank you very much. I had two on business interruption please and one on Switzerland.

On business interruption and I just wondered could you update us on your view of the proportion of your policies that specifically exclude pandemic risk from the terms and conditions? And also you said it's too early to make an estimate of the claims cost but I'm just wondering if you can give us a little bit of comfort in terms of the ballpark we're talking about in terms if you know is this an earnings event, I think it is comfort but this is an earnings event that you envisage in the rather than a potential balance sheet event?

And then on Switzerland, two years ago I guess you essentially gave away some life business to the local players. Now it seems it's coming the other way.

I can appreciate that this is semi autonomous business and doesn't have the market risk of the business that has gone away from you but I'm just still wondering if maybe you could add a few words about why you are a better owner of that business than the local players and any extra color there would be very helpful? Thank you very much.

Thank you, Peter. So the vast majority of contracts across a group are not exposed to COVID-19 and why, because as you all know BI coverage typically triggers in the case of physical damage in the insured premises.

And second, we apply [indiscernible] wordings in most cases as well and notably for our business in North America. So there are some cases where we may have exposures.

It is by exception and we have the following cases; where there is an explicit pandemic extension and it is the case sometimes but really exceptions. Second, where the policy wording is subject to interpretation and this is being reviewed on a case by case basis.

And third and this is the most frequent case, when in some jurisdictions industry wide solutions and concessions are made. This is the case for instance in Germany for cafes, restaurants, hotels.

This is going to be the case may be in Switzerland also sometimes in the UK further to the positions taken by advancement. So industry wide solutions, so therefore I can confirm to you that it's an earnings impact and not a balance sheet impact.

Regarding Switzerland what happens is that actually in the Q1 you saw that this business, the semiautonomous business is growing because some of our competitors changing their conditions in the traditional business are losing their customers who are very happy to finally find [ph] solutions like the solutions we are providing in Switzerland. And this is what this business in Q1 delivered very well.

Okay, thank you very much.

Thanks and good morning everyone, three for me if it's okay. Firstly it was just on travel, just wondered if you can give us any more context on travel claims which I'd assume would mostly be front loaded so it seems so far there?

Secondly on event cancellation, thanks for giving guidance for mostly the next 6 to 12 months, how much exposure do you have beyond that for example if [indiscernible] was canceled next year after the installment could have impact on big events next year, etc? And third one from me is your three good sized disposals are meant to be completing this year and actually if you're still not completing again possibly missing in other games for completion date just could you give us an idea of do you still expect these three deals to complete, when and will there be any adjustments to the price?

Thanks.

So I will start with the third one which is relatively simple. The two transactions you are referring to are AXA Belgium and the CE disposals.

These processes first there was absolutely no discussion about the price. So, nor are we to have on this point.

Second, the process is going on in a completely normal way. Just then a question of execution of the deal which might from time to time be postponed by one months, two months, three months so it's purely a question of months and not a question of price or the question of any kind of other possible questions like competition or whatever.

So we are very confident that this transactions will be closed. I cannot guarantee you that the timing will be in Q3 or Q4.

Or if there is a delay it may be January or more than December this we don't know. But at least one of the two should close this year.

And the second one at this stage is scheduled for Q4. So confidence on these two transactions.

Regarding travel, this is A business with less than 1 billion GWB, more I would say mid triple-digit as we say most of which is realized by our assistance business which is a service like business. So we have an impact but I would say that it's not the biggest hit week we will have.

Regarding events cancellation what we have done is that based on our what we see the assumptions we have taken is that there would be a loss of 70% of our exposure from March to September and from September to March 2021 we have taken 25%. So this is the way we did.

So it gives you an idea of our total exposure with overall percent [ph] but this is the assumption we have taken.

Thanks for that. And so just for -- you are saying that the context of travel claims not the biggest you will have.

I mean are we talking triple-digit millions, are we talking double-digit millions, any context around that?

Look. If it was mid triple digit we would have said it.

So it's much less.

Okay, thanks.

Hi, I have three questions please. On the property covers that [indiscernible] in the U.S.

which might include BI, I just wondered whether those are written on the standardized wording or whether there's a sort of separate wording given some excess surplus business? And secondly in AXA's reinsurance book is there any trade credit exposure?

And then finally just looking at the sort of raising environment to the commercial wholesale business from your comments and others this morning, it does seem that there is probably good right holding [ph] stories, any appetite to change the Group capital allocations and trying to take advantage of that? Thank you.

So starting with the third one, you are right to say that under commercial lines the prices are going up. And this is what we expected when we released our numbers on the 20th of February, this is what we said.

And it's very true notably in North America and I must confess that we are in terms of price increases above our expectations right now and this gives me the opportunity to say that excluding COVID-19 AXA's business is well on track with our expectations. So we're getting capital allocation.

I mean there is no -- there is no problem to grow at the moment, there is not a capital shop page in the businesses which want to benefit from this price hardening let's put it that way. Your first question related to the property sort of BI coverage in the U.S.

I think so -- your question was is all your business ISO with ISO wording and to my knowledge in the very vast, the vast, vast majority of the cases it is ISO. So, the U.S.

the only question is at the moment is -- will there be a political move or regulatory move to force anybody to pay more than what is contractually stated and this thread has been existing for the last six weeks I would say with ups and downs but we are pretty confident that it will not go through because it would be anti-constitutional. So, at this stage we are pretty confident for the U.S.

business.

And your second question maybe Jon could you repeat the second question.

The second question, I wonder whether these -- sorry Andrew, I was wondering whether you have got any trade credit exposure in the reinsurance book in XL because you don't seem to -- you haven’t mentioned it in the release so like [indiscernible]?

So there is some exposure under reinsurance of trade credit. I will not give you any number in terms of claims because today we have no claims.

However it's an assumption. The GWP is giving you I think $300 million.

Okay, so pretty small. Thank you very much.

Hi everybody, hope everything's going well. Just a few questions, you have been kind enough to give some GWP numbers, can you give a BI GWP number or proportion of premiums?

In terms of motor claims we can see some companies have had early data on a lower loss ratio, can you give us an idea of how much kind of frequency has gone down and to what extent your refund will be applied for the months the frequency has gone down? And then a bit more comment please on the expense reduction.

So I think that you've talked about measures that you could take, now some of this of course would be because of lower acquisition costs but what other measures can you take to offset some of the earnings impact? Thank you.

So the first question relating to the BI numbers, I answered in the first part of this session with what I can say. So it's an earnings impact, it is not a balance sheet impact.

And giving GWP numbers will not be I think a good indication for what you're looking for. So, the second question is motor claims frequency.

What we observe across the -- depending upon the countries our frequency during the consignment periods, down between minus 40% and minus 80%. So, potential refunds, it's difficult to tell you.

At this stage we don't refund the premiums for two reasons; first, our priority is to support our customers who are really in trouble financially from the health point of view. So we are dedicating all our efforts on this population or this segment of clients.

It can be physical person I refer to the people with chronic disease, pregnant women but also it can be SMEs, very small enterprise. Second, Rio [ph] is not finished so in the loss ratio from motor you see obviously that we anticipate Q2 to be excellent in terms of loss ratio.

However there is also Q3 and Q4. So let's see how the customers will behave because they might use less public transportation.

The oil prices will be relatively low and all of these should be looked at on the medium term basis and not very short-term. So some mutual companies have started to refund.

It's at this stage not the majority and we are very keen to look at the overall balance of our P&L before refunding rebate clients after just one or two months of pretty good experience. Expense reduction, you're right to say that acquisition costs are reduced.

So what we're looking at is actually our expense ratio, overall, which means that we have to tackle part of our fixed cost and obviously we are reducing a lot of general expenses and reducing as well our investments.

Do you think, sorry, if I may come back do you think that will be -- we will be able to see, do you think that could be quite significant, so you have the tools to offset a lot of the claims without revenue reduction?

Now, when I am speaking about expense ratio I'm referring expenses related to revenues. You cannot offset with cost the higher claims.

I mean it's disproportionate.

But I mean what I'm saying is I guess to make it clear, do you think you can maintain expense ratios or do you think there will be a spike but you're trying to limit the spike?

So it very much depends on the forecast for the revenue decrease. So far what I'm just telling you is that the objective we have set to entities is to manage expense ratio.

So in some cases they will do a bit better and some of the cases a bit -- they will not make it. It very much depends on your business mix, various countries, the competition pressure, a lot of things.

So in the countries where you have a major drop in revenue it would be more difficult. In some of those it will be moderate, it would be easier.

So it's more -- I am giving here [indiscernible] how we manage during the crisis, we took out start expense ratio and we do the best to try to maintain it.

Okay, thank you very much. Thank you.

Thanks and good morning everybody. Three questions from me please.

Firstly the investment margin I think Ambition 2020 had a plan for between 55 to 65 basis points on the large investment margin. 65 bits in 2019, could you just comment on the outlook for that margin and later if you are confident you can reach that.

Interest alone how much really you have gotten in terms of policyholders sharing versus the minimum level please? Secondly could you just provide an update in terms of Q1 that can assume large losses at XL and how is the underlying performance of that business so far year-to-date?

And my final question just ran on -- on health side of things please, presumably with people being followed and with medical practitioners being we had taken place and that's going to lead to a spike in health costs in time. If you could just shed a little light about how to think about that provision in the current environment please?

Thank you.

So first the investment margin, you're right will be a bit lower, why because the dividend yield from equity -- private equity, even real estate will be lower. It will not be -- it will not impact -- we are not touching the guarantee level.

So, if you look at the really what will make the difference this year investment margin, it doesn't come as you know the main driver. We didn't refer to it in our press release.

We referred more to the fees and on equity positions [indiscernible] of our unit business. Second, nat cat losses I think are in line with our budget.

So it's -- there were some nat cats in Australia and in the South of the United States in Q1. Nothing really special in April, so we're pretty in line with our budget.

And lastly on the health side, today we don't see an increase in claims partly because people don't go to the hospital or to the doctors. So it's a little bit like the motor business and some places people don't use there or don't go to the -- don't spend on the health side because they are scared to go to the big spaces and because they got deck on side [ph].

So, this is what's happening in the short-term and there might be a spike in health cost maybe in Q3. But overall we don't see -- we don't expect major deterioration.

And the last point is the mortality, we flagged when the crisis started the risk we had on the mortality which was to say for around 1 million deaths in the world we could have impacts of 100 million Euros after tax for us. We are still away from this number.

However, at this stage we have not seen -- we have not observed any deviation in our mortality rates on our clients.

If I could just return quickly to XL just the underline performance in Q1 and what your real experience has been year-to-date please?

So I told you before that XL excluding COVID-19 effects was in line with our expectations. So which means that it's true for the nat cat, it's true for the large claims.

So it's across the board.

That's great, thanks very much.

I say that as well that prices were above our expectations and notably under famous excess casualty lines. And it's continued in April.

Right, thanks again.

Oh, hi Etienne, couple of questions please. Firstly, can you update us on discussions about your dividend with the ACPR?

And then second question is sort of looking at COVID more widely and coming back on some of the questions you've had, what would you say is your biggest worry, is it actually top line revenue or is it claims, which one sort of in your management discussions are you most concerned about? Thank you.

So on the dividend, of course I'm not going to tell you today what would be the ultimate decision but I can give you some element of context in case you don't know it. The Board had made a proposal for the annual general assembly to pay 1.43 Euros per share which means 7% increase in dividends.

Afterwards there was I would say an information published by the Eiopa's but most importantly for us by the ACPR urging French insurance companies not to pay dividends before October at least. So we decided to postpone the General Assembly in order to take the time to understand exactly the position of the ACPR and to have a chance to dialogue, to have a dialogue with them.

So this is what's happening and you will know more in the upcoming weeks because the decision will be -- the new proposal if it's new will be made in May. Regarding the COVID-19 I will not answer precisely this question because you're trying to assess and put a number on the one aspect of the other.

I can say that it is still a bit early. I would say that top line of profitable business is very costly so I would say the top line in life doesn't really need too much because especially if you look at 2020 because the first year is not where you get the most or the biggest profitability because it's a -- their construction is a long-term business.

In terms of P&C it can be very costly if there was a severe drop in revenues and of course claims I will not comment. So I will not to make this comparison but I am sure you have already an idea of what's more costly.

Sorry, just going back very, very quickly so to reiterate on dividends is it correct that your clear intentional wish is to tie your 2019 dividends, you think you have the financial ability to do so?

Sorry if I was not clear, the liquidity, the solvency and the profitability of last year is lowest to dividend and this was based on all of this that we made this proposal to the General Assembly. So the only thing which was new for us was the statement of the ACPR, so the French regulator.

Yes, that's very clear. Thank you very much Etienne.

Thank you Nick.

Hello, thank you very much. On business interruption I appreciate you don't know an absolute number yet, but could you comment the little bit on what you're thinking about the mix of the claims that you're seeing with regards to the three areas that you talked about right at the beginning.

So what do you think is some of the geographic mix in terms of U.S. versus non-U.S.?

And what do you think in terms of your carrier exposure in terms of XL versus the rest of the Group the instant you get some of that feel? Thank you.

And then secondly a couple of months ago I think I actually used to talk about the 100 and 200 pandemic or 1 billion Euros. We learned a lot about and then it is sort of fit what we knew three months ago.

So I'm just wondering to what extent do you think your original models were valid and without going into too much detail if they are not valid what are you learning? And then lastly on the solidarity measures, you gave the good examples in France, is there any way that you can put just a global number on what you think is the cost of the solidarity measures to you at the moment please?

Thank you.

So as usual I will start with the third one. It's difficult to know as well because of solidarity measures have started but it's not yet finished.

You'll see that as long as the consignment is there, there are still a lot of discussions and people in need for support. So I can tell you that Group wide it is a few 100 million Euros.

And then let's be careful because we are not always clear between what is sometimes solidarity measures and what is BI if you see what I mean because sometimes we are in between. Regarding the pandemic hit on the original model it's true that we are realizing that the pandemic hit it's not just a spike in mortality rates it's much more than this.

And therefore I would say that the original models from this point of view have to be reviewed. And as we just discussed the mortality, the cost of the mortality even if it's million odd death it is not what hits us the most, it's the resulting systemic risk and related to I would say the drop in GDP.

So the -- and the risk related to events cancellation, to business interruption, and so on one side and the financial implications on the other side on the asset side. So it has to be reviewed clearly.

And when you discuss with the actuaries here this is clearly on their agenda. This is something which will be reviewed this year towards the end [ph].

Related to BI, so BI it's not XL or not XL it's across the Board for all commercial lines, right. It is a commercial lines issue.

I told you that there were a lot of discussions in Switzerland, in Germany, in the UK, in the U.S. so it's across the board, it's overall.

So I will not give you the split and in terms of U.S., non-U.S. my guess is that it might be a bit more costly on the non-U.S.

part but it's still early -- too early because if you look -- if you speak with our U.S. colleagues, so not colleagues but our U.S.

peers they will tell you that this is the risk also in the U.S. So it's really I don't want to answer not because I don't want to give you the numbers but because it's really too early really.

So we will know more quarter by quarter and every time we have information which we think is reliable and which is sensible we will provide it to you. But today we went beyond the revenue indicators because we knew that there was a need for information but we are already at the limits of what we can tell today.

That's helpful, thank you. But what you are saying is since your option loss is global they are not just U.S.?

Yes exactly.

Thank you.

Good morning all. Can I ask three questions.

Firstly, could you give us a bit more detail on social insulation in the U.S., I know that you're in a sort of discovery period in the fourth quarter as to just how much it was accelerating, can you talk a little bit more detail in the first quarter as to whether that's settled down and that you are calmer about that issue? Secondly you gave as a full year your schedule of debt redemptions which could be between 6 and 9 point hit, are you in a position now to say well which end of that scale it is going to be?

And then thirdly for Q2 firstly could you give us an update from March as to where the coverage is and also whether the sensitivity that you've given historically still holds or whether you have been hedging heftily in the recent period and therefore you -- your down side sensitivities maybe slightly less?

So regarding the social inflation I would say that we have not observed any new information, any changes in Q1. So we just saw the price is going up but the claims no new information I would say.

Nothing that changes the view we gave you on the 24th of February. Second, the debt reimbursement, your question was what kind of impact on solvency too is that correct?

No, I think you said it was hit from Q2 between 6 and 9 point this year, I was wondering if your current plans were more likely to be 6 or 9?

Okay, so the debt we have reimbursed, the 1.3 billion Euros has an impact of minus 4 points. So if you want to say to know if it's minus 6 or minus 9 I would bet for minus 6 rather than minus 9.

And your question related to the solvency situ number, at the end of March which was 182%, I would say ahead of April, the main event is certainly the debt reimbursement. So on a Pro Forma basis if you start from 182 you could reduce by 4 points.

Was that debt to market?

All the other elements I would say are not material.

And the downside of sensitivity is what?

Excuse me.

The downside sensitivity, have you hedged the bounty more heftily since the year-end?

Sorry, no. No change on the hedging.

No change in hedging and maybe because we are speaking on certain issues, I say in the previous response answering for the previous question that are actually they are looking at the traditional models which is true but with no impact on the solvency situ model. It's too early stage.

Thank you and good morning Etienne. Just a few questions all on capital, first of all again sorry going back to solvency situ, I mean currently your solvency duration is about 182% and you have redeemed some debt.

I mean what gives you confidence on this ratio given that the credit markets continued to remain volatile, interest rate has started going down again, and if I remember your hurdle rate was 170% to 220%. So, I mean you are not really far away from your hurdle rate, so what gives you enough confidence that the solvency capital is okay from a 6 to 12 month view, that's number one?

Secondly is -- can you give us some clarity on how the local such capital is at the moment, is there any breaches in those local subs which good impact the cash remittances from subsidy based on the current view? And lastly the new sensitivity you have provided on credit rating downgrade is pretty interesting because it's on the 6.4, 20% of your portfolio getting downgraded which is like a big portfolio getting downgraded by one full letter.

And it only impacted by 6 percentage point, can you give some clarity as to how that works, any thoughts on that would be helpful? Thank you.

So, first of all the solvency ratio is a number you know and then you have all the sensitivities to figure out what it could be, under which circumstances. So here I'm not going to provide you with our estimate of what it will be.

So, and just to be more precise at the end of April when we said you can reduce by 4 percentage points the main reason is that the lower rates were offset by an overall spread since March, so all of this is moving. The other point which is important in my view is that the 170% even if we were to reach it would have no consequences.

So, you know that we have different targets, we have 170 but we have also 140. And the regulators has 100.

So don't over estimate, you know the fact that we will be at 171 or 169 or 165. I'm not sure it will have an impact in the short-term.

The second point is we have no breach I would say at the local subsidiary, local entity level. And I can tell you that in the current environment the tangibility continues to work within the group and our liquidity position as a result is strong at the holding level.

And then the new sensitivities we have provided of minus 6 points, I would say that when you are -- the high rated -- the highly rated part of the portfolio when it goes one letter down doesn't cost us that much. So it's more at the bottom.

And at the bottom the exposure is pretty limited. So this explains why the minus 6 points might see my talking to you at this stage.

That’s great Etienne, thanks a lot.

Thank you very much. Hi Etienne, I had three questions.

One, these are really pinprick questions, you'll love them. On debt gearing you said below 28% pro forma and I always wonder what is pro forma, what am I supposed to think here, I just wondered if you could give us a kind of a ballpark figure of what an actual figure would be?

The second, if you had this really interesting comment about solidarity effort and there's an overlap of business interruption, I just wondered where you're going to book these solidarity efforts, I don’t understand what they could be? And the third question is on the you get some positives in the press release which was on investment income gains in adjusted earnings and net income of 200 million and 300 million, why did you give those figures, is it because you think that they are sustainable for the year or is it just to give us a kind of breath of fresh air, I don’t quite understand because kind of the other replies so far is so somber and I am kind of thinking, oh my gosh, you said positive here which we are missing?

And then the last one, the I circled a little bit with the press releases a whole because of the figure for event cancellation but no figure for business interruption and that seems to be the really big one which is kind of the elephant in the room and so far I haven't gained much clarity on that? Anyway sorry, too many questions and I hope you can help me out.

Don’t worry Michael, they are clear questions. So, the pro forma on the debt gearing is just that if you don't -- if you take the balance sheet at the end of 2019 and you reduce your debt by 1.3 billion Euros you come to the number we have indicated.

That doesn't mean anything else than that. So it's a very, very basic calculation just to give you a fair idea.

Second, the solidarity efforts, you wonder how we will book them. Most of them will be booked under underlying earnings.

There might be one or two exceptions if we are like in France we are just wondering if the amount which has been paid because it's not deductible and because it was -- there was no choice basically, could be considered as an exceptional items but it's more the exception. So I would say the majority of the impact would be in the underlying earnings.

Third, your question is -- don't make it too complicated. We gave these numbers first because we knew that the question would come and because we had the numbers.

We know this information. Because we know it's a tricky calculation we gave it to you not to give fresh air because we didn't know when we decided that we would deliver this information what would be at the end of the day impact.

And so it is just clarity, don't see anything else than this and we don't expect you to take that as a good news or the bad news. It is clarity and information and make the best use out of it but it's more to help you.

Lastly, I understand that you would like to know more about business interruption but please understand that the nature of the claims is much easier to grasp to get on this very short-term risk on event cancellation because it was immediate. We had the information much earlier than on the business interruption.

So if you think for the next time we should not give any number please let us know but event cancellation we know much more. So that's it, it's nature of the claims which makes it easier.

Okay, I understand. Thank you.

Yes, good morning Etienne. I have got two or three questions.

The first one would be related to the recessionary impact on your [indiscernible] development, actually you are providing some numbers for March and April and you are highlighting that life and health business is more significant impact. I was wondering why do you see -- I was expecting your business to be more on I think premium than single premium.

So maybe you can help us to understand why the life and health revenues are I would say more impacted? Second question related to this is on the P&C side, could you maybe touch upon the part of your P&C revenues maybe more in the commercial lines which you believe is recessionary exposed or sensitive?

And the third and last question would be related to the life and health reserves. Are you seeing I would say early sign that the policy holder are changing a bit in terms of behaviors [ph] and you are seeing some -- I would say some temptation to surrender the policies at the present time?

Thank you.

So I will start with the third question. You have seen that the net inflow don't signal a change in behavior.

And in terms of retention at the end of March the numbers were pretty stable. They were up of course in the P&C business but in savings business, in life and health business no change in behavior.

Second, in terms of top line trend I would say that the life business is by far the most hit business because you have the single premium in savings which have a huge impact. So it's particularly true in France, Italy, and Spain.

And so the drop is in the area of minus 20%. So it's clear but it's really this effect of accounting, right.

It could be counted differently in terms of pure income impact, it's much less than that. P&C is the second business which is hit with the negative trend in April between minus 5 and minus 10 depending upon the country.

Italy is there, also France and Italy are most hit countries. And health is very resilient.

So I wouldn't put life with health in this context. And for the P&C, of course the GDP drop will have an impact on the top line because some premiums are indexed on the level of activity.

So we'll see that it will have an impact on the commercial lines. So you will have some positives on the hardening of the prices and some negatives linked to let's call it GDP.

Thank you. I think at the beginning there was a question on AXA Life Europe and I just wondered if you could say a little bit more than that?

And then I'm going to press a little bit just on the -- sorry, is it down or up from the 27.5 or put another way if you want redeem any more debts would you actually -- would you hit your 25% to 28% target by the end of the year? Thank you.

So AXA Life Europe, so you are referring to the disposals and sorry if I misunderstood the question, I was -- I answered I thought that the question was related to the two transactions and on this year. AXA Life Europe is a transaction which has been announced in 2018, at the end of 2018 and which is still under discussion given its complexity.

So the buyer and the seller always motivated to make the transaction. But the discussions with the regulator that there'd be 9 under our complex, long lasting and this is the only thing I can tell you on this.

On your question Michael, your second question related to the debt gearing, can you precise a little bit more what you mean with that?

Well, I'm worried because you didn't answer it when I first asked and I am thinking oh gosh, have I missed something. So, you said pro forma 27.5 or 28, whatever the figure is, but insisting on pro forma when the world has changed so much I'm kind of thinking, well, but what is the figure now.

And so another way of asking it, instead of saying, well, can you give us a figure now, maybe you don't have it, I don't know is if you were not to redeem any more debt beyond the 1.3 billion you have done, would you at the end of the year still be in your 25% to 28% target range? That was all.

Thank you.

Okay, which is another way to ask what will be our earnings this year. So, and on this one, I will not answer because the gearing it's not only the question of debt, it's also the question of retained earnings.

The OCI does not play a role and therefore, I will not answer this question, Michael.

Understand, thank you.

In that case, we thank everybody for joining the call and hope you stay safe and well. And we're happy to answer any of your questions and follow-ups over the next days and weeks.

And we wish you a very good day. Bye-bye.

Good bye to all of you, thank you very much.