Europe's second-biggest insurer, AXA, posted better-than-expected first-half profits yesterday and raised its cost-savings target, shrugging off the impact of falling interest rates.

Net income rose 25 per cent on a comparable basis to €3.01 billion in the first half, boosted by strong earnings growth and lower restructuring costs, the company said in a statement. Profits also benefitted from gains realised on the rising value of its financial assets and derivatives as interest rates fell over the period.

AXA’s shares, which opened up 3 per cent after its results, have fallen more than 13 percent since the start of the year as insurance stocks suffered from investor perceptions that low interest rates crimp earnings from their vast fixed-income holdings, making it trickier to make fixed payouts to clients. – (Reuters)