Credit Opinion: AXA. Global Credit Research - 09 Jul Ratings. Contacts. Key Indicators. Opinion SUMMARY RATING RATIONALE.

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1 Credit Opinion: AXA Global Credit Research - 09 Jul 2015 Paris, France Ratings Category Moody's Rating Rating Outlook STA Senior Unsecured MTN (P)A2 Subordinate A3 (hyb) Junior Subordinate A3 (hyb) Junior Subordinate Baa1 (hyb) Commercial Paper P-1 Contacts Analyst Phone Dominic Simpson/London Alexandra Aspioti/London Antonello Aquino/London Key Indicators AXA[1][2] As Reported (Euro Millions) Total Assets 840, , , , ,389 Total Shareholders' Equity 68,034 55,444 55,961 48,784 53,868 Net income (loss) attributable to common shareholders' 5,024 4,482 4,057 4,189 2,745 Gross Premiums Written 86,267 85,481 84,592 80,570 83,390 Net Premiums Written 81,935 80,385 80,517 77,146 79,957 Moody's Adjusted Ratios Goodwill & Intangibles % Shareholders' Equity 69.9% 80.4% 81.9% 96.0% 93.8% Financial Leverage 27.3% 31.5% 33.3% 37.4% 34.9% Total Leverage 32.9% 37.1% 38.5% 43.1% 40.1% Earnings Coverage (1 yr.) 6.2x 5.4x 4.5x 4.9x 3.7x [1] Information based on IFRS financial statements as of Fiscal YE December 31 [2] Certain items may have been relabeled and/or reclassified for global consistency Opinion SUMMARY RATING RATIONALE AXA SA ("AXA"), rated A2 for senior debt with a stable outlook, is a holding company listed on Euronext. Its life and non-life insurance subsidiaries have leading positions in several major insurance markets. AXA is market leader in France, where AXA France IARD (Aa3 insurance financial strength rating) is number two in P&C and AXA France Vie (Aa3 IFSR) is number three in life, in Switzerland (AXA Versicherungen AG, Aa3 IFSR, and AXA Leben AG) and in Belgium (AXA Belgium, Aa3 IFSR). The Group also holds a strong market position in Germany (AXA Konzern, Aa3 IFSR for the main operating entities), in the life market in the United States (AXA Equitable Life Insurance Company, Aa3 IFSR), in the UK P&C market (AXA Insurance UK plc, Aa3 IFSR), in Japan and in

2 Central and Eastern Europe. AXA's senior debt is rated two notches below the IFSR of its main operating subsidiaries, which is narrower than the standard three notches. This notching primarily reflects the high level of geographic and business diversification of the Group, as well as the strong liquidity at the holding company level, thanks to centralised treasury management, stand-by revolving loan facilities from several banks and a liquidity contingency plan. Credit Profile of Significant Subsidiaries AXA France Moody's Aa3 IFSR on AXA France's legal entities (AXA France IARD and AXA France Vie) reflects the companies' leading position in France as well as the well-diversified risk profile of the combination of the two companies. AXA France has also a strong financial profile, and despite increasing competition in the French market, the Group recorded strong profitability in recent years. The ratings also take into account the multi-channel distribution strategy and the concentration of activities in one single country. Moody's also takes into consideration AXA France as being a prominent part of AXA Group when assessing its financial strength. AXA France represents 27% of the 2014 Group's gross revenues. It consists of two operating companies, a nonlife company, AXA France IARD, and a life company, AXA France Vie. The business mix of AXA in France consists of Property and Casualty (29% of the 2014 gross premiums written), Health and Protection (31%), and Life and Savings (41%). The products are mostly sold through three distribution channels: tied agents, brokers and salaried sales force. AXA Financial The Aa3 IFSR of AXA Equitable Life Insurance Company (AXA Equitable) and the A2 senior unsecured debt rating of holding company AXA Financial (AXF) are based on well-established positions in the individual annuity and life insurance markets and on the ownership and expected continued support of parent, AXA. The Aa3 rating reflects an A2 standalone credit profile of AXA Equitable with two notches of uplift from AXA. In addition, strong brand names and presence in the individual retirement, life insurance, 403(b) savings and estate planning markets help to anchor the ratings. AXA Equitable utilizes diversified distribution channels including a strong captive agency force. The company's strengths include diversified earnings that benefit from economies of scale and solid capital. These strengths are partially mitigated by a business profile dominated on the liability side by a legacy portfolio of variable annuities (VA) with guaranteed benefits, with the complexity, risks and challenges inherent in managing this volatile business. While AXA Equitable has substantial hedging, it still has exposure to earnings, capital management and asset liability management challenges associated with its large block of VA business with longterm guarantees. Over the past few years, AXA Equitable has lowered the risk profile of its newer VA products (selling non-guaranteed VA products) and universal life (UL) policies with secondary guarantees. These actions will lower the company's risk profile over the long term. Operating subsidiary, MONY Life Insurance Company of America (MLOA) is rated A1, which reflects its standalone credit profile as well as one notch of implicit support due to the fact that it is a core company in the AXA US family as virtually all new life insurance products outside of New York will be sold through it. AXA Insurance Group UK Moody's Aa3 IFSR of AXA's P&C operating companies in the UK reflect both the benefits of ownership by AXA and the particular characteristics of these business units. AXA's non-life insurance franchise in the UK is good, as evidenced by its top five market position. AXA made several add-on acquisitions in the UK since 2006 to get better access to the broker and direct sales distribution channels. The Group writes both commercial and personal lines with a particular focus on the SME sector. The Group continues to focus on operational improvements, although P&C profitability in individual lines remains one of the credit weaknesses of AXA in the UK. In Life, the Group focuses on the health/protection business sold through direct channels as well as its wealth management operations, both activities presenting a low risk profile. AXA Germany AXA Lebensversicherung AG, AXA Versicherung AG, AXA Krankenversicherung AG, all rated Aa3 for Insurance Financial Strength, are the most important operating entities of AXA Konzern AG, which is the holding company for the German operations of AXA. Moody's considers the combined operations of AXA Konzern (called AXA

3 Germany below) as one analytic unit. Moody's Aa3 insurance financial strength ratings on AXA Germany's main operating companies reflect the company's strong market position in the German insurance market, with a share of about 5%, strong brand recognition, a very good diversification between P&C, life and health, and a satisfactory product risk in its P&C book. Further credit positives are AXA's conservative asset liability management policy and its prudent reserving policy. The Aa3 ratings also reflect the implied support from the AXA Group. More negatively, AXA Germany's capitalization remains moderate at the subsidiary level. Moody's also notes that low interest rates continue to pressurise profitability. A further negative is the relatively low diversification in distribution with heavy reliance of AXA Germany on its tied agents and brokers. Credit Strengths Credit strengths for AXA are as follows: - Superior franchise strength and high degree of geographic and business diversification - Sound balance sheet with low asset/liability risk, good asset quality and prudent reserving practices - Sound liquidity position, reflecting the conservative debt management, the existence of significant alternative sources of liquidity and the benefit of its centralized treasury management - Resilient operating performance Credit Challenges Credit challenges for AXA are as follows: - Protect the underlying profitability of life business in a context of low interest rates, reduced demand for life savings products and potential losses from its legacy VA business - Increase capitalisation which we view as lower than those of Aa-rated peers - Maintain financial leverage below 30%; historically, leverage has been high and higher than Aa-rated peers according to Moody's definition Rating Outlook The outlook of AXA is stable. Certain aspects of AXA's financial profile, particularly capitalisation, financial leverage and earnings coverage, have been at the lower-end of or below our usual expectations for a group whose main insurance operating subsidiaries have Aa3 IFS ratings, although leverage metrics have recently become more in line. These aspects are mitigated by AXA's strong business profile. Furthermore, the group has also demonstrated good and stable underlying profitability in the last five years and we anticipate that AXA will continue to maintain a good level of profitability in the near-term. What to watch for: - Underlying profitability development in key mature markets and in emerging countries - Economic solvency evolution, and any Solvency II updates -Evolution of investment portfolio in light of low interest rate environment What Could Change the Rating - Up The following factors could put upward pressure on AXA's ratings: - A sustainable reduction in financial leverage to below 30% and an improvement in earnings coverage to the 8x- 12x range - A sustainable improvement in the group's capitalisation level and quality What Could Change the Rating - Down

4 A downgrade of group debt ratings will likely be triggered by a downgrade of one or more of its main operating companies. The following factors could lead to a downgrade of operating companies: - A sustainable reduction in profitability, also prompting a reduction in the earnings coverage ratio - A weakened solvency or financial leverage position - A deterioration in asset quality Capital Structure and Liquidity AXA SA issues or guarantees most of the financial debt outstanding in the Group. As of 31 December 2014, the Group had around EUR19 billion (YE13: c.eur 20bn) of debt (excluding related derivatives and AXA Bank debt) outstanding, of which 87% was issued directly by the holding company, 6% by AXA Financial, the remaining 7% by other subsidiaries (including bank overdrafts). The Group's financial leverage reduced again to 27.3% (on Moody's basis, including adjustments for pensions and operating leases) in 2014 (YE13: 31.5%) benefiting from the 19% increase in reported equity (excluding perpetual subordinated debt) and a lower level of debt. This is the first time in many years that AXA's adjusted financial leverage has been below 30%, and is now at a level which is in line with Moody's expectation for AXA's rating level. At year-end 2014, double leverage at AXA SA reduced to 143%(153%) (excluding the perpetual subordinated debt from the shareholders' equity), as did total leverage to 32.9% (37.1%) which remains somewhat elevated but below historic levels of around 40%. At year-end 2014, the debt mix was around 17% senior and bank debt, and 83% subordinated debt. The Group's debt repayment profile is sound, with an average maturity of 7 years as of 31 December 2014, assuming all early redemption options are exercised (and excluding EUR2.7 billion of perpetual debts with no redemption options). Most of AXA's debt is long-dated. Around EUR6.0 billion of debt (around 30%) is maturing between 2015 and 2020 (assuming the first call date as the de facto maturity date), with the maturity profile benefiting from AXA issuing (i) GBP724 million and EUR984 million undated deeply subordinated debts in November 2014 in connection with an exchange offer for four outstanding undated deeply subordinated debts with call dates between 2016 and 2019 and (ii) EUR 1.0billion in May 2014 for refinancing of EUR1.5billion of senior debt which matured in January As a result Moody's believes the refinancing risk to be low. AXA SA's primary source of cash-flow is the dividend capacity of its insurance operations. In 2014, AXA SA received EUR3,342 million in dividends from its subsidiaries (2013: EUR3,189 million), whereas AXA SA incurred EUR1,128 million of interest expense (2013: EUR1,102 million) and the dividend paid in 2014 for 2013 was EUR1,960 million (while the dividend paid in 2013 for 2012 was EUR1,720 million). Although the Group traditionally does not maintain a significant amount of cash and investments at the holding company level, cash and cash equivalents have been higher recently on AXA SA's balance sheet (EUR 2.8 billion and EUR 3.0 billion at year-end 2014 and 2013, although the balance has been reduced by the EUR 1 billion senior debt repayment in January 2015). Cash is mostly invested in highly liquid money market instruments. AXA's liquidity is much stronger than the liquid resources held at the AXA SA level would suggest, thanks to a centralised treasury management, banking arrangements and a liquidity contingency plan. The Group has a centralized treasury management for some of its European operations (including AXA France and the Group holding company AXA SA). AXA also has banking arrangements (either bilateral or syndicated) providing committed credit facilities of around EUR13 billion, undrawn at 31 December At year-end 2014, the Group's 5-year average earnings coverage improved slightly to 4.9x (YE13: 4.6x) benefiting from the 1 year coverage in 2014 improving to 5.2x (YE13: 4.7x). Although the 5-year average figure includes some exceptional items related to sales of subsidiaries, and Moody's considers the earnings coverage on an underlying basis to be resilient at above 5x, the ratio is low compared to Moody's expectations for Aa companies. Moody's believes that AXA's fixed charge coverage will remain constrained in the next few years. Improvements of this ratio in the short-term would not come without a reduction of the gross debt level. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on for the most updated credit rating

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