Axa Winterthur, the Swiss unit of France’s Axa group, had a tough 2016 to communicate: It’s claim of having achieved a «good result» won't change the fact that the company performed worse last year than in 2015.

The overall business volume at the Winterthur-based company declined 0.4 percent to 11 billion Swiss francs, operating profit dropped 7.5 percent to 829 million and net income was down 13.8 percent to 801 million – more than 100 million francs less than in 2015.

Low Interest Rates Weigh on Profitability

Reasons for this result are to be found in lower yields on fixed-interest investments and higher hedging costs. Profitability also suffered from temporary swings at foreign-currency and interest-hedging derivatives. In short, Axa Winterthur struggled with the effects of the low or negative interest rates maintained by central banks.

The combined ratio – crucial in the insurance industry – added 20 basis points to 86.2 percent, the company said in a statement today.

Investments in Healthcare Market

Axa Winterthur, Switzerland’s largest property insurer, maintained its strategic development plan 2020 and aims to invest substantially according to this program. Axa will launch a new service in the health market of Switzerland this summer and also plans to offer new simple and digital add-on healthcare insurance products.