[ DAC at end 2003
Gross Net
Total - AXA Group (Euro millions) 9,720 4,810
AXA Financial (Euro millions) 4,945 51% 3,214(1) 67%
French GAAP U.S. GAAP
------------------------------------ -------------------------------------------
$ million DAC Account value DAC/AV DAC(A)(B) Account value(C) DAC/AV
--------- --- ------------- ------ --------- ------------------- ------
Traditional Life 900 9,243 10% 910 9,243 10%
Variable and interest
sensitive Life 2,309 16,830 14% 2,309 16,830 14%
Annuities 3,004 57,955 5% 2,999 58,008 5%
Other 31 504 6% 31 504 6%
- --------------------------------------------------------------------------------------------------------------------------------
Total 6,244 84,531 7% 6,249 84,585 7%
(1) Net of Tax
(A) net of initial fee liability
(B) excludes impact on DAC amortization of unrealized investment gains
(C) includes policyholders' account balances and future policy benefits and
other policyholders liabilities net of reinsurance ceded; gross of the fair
value of GMIB reinsurance contracts considered derivatives under SFAS No.
133 of $29 million
[LOGO] Full Year 2003 Earnings-Appendices-February 26, 2004-Page 7
[ DAC - AXA's Reversion-to-the-mean (RTM) methodology is justified
A significant assumption in the amortization of DAC on VA and VL&ISL
products relates to projected future Separate Account (S/A) performance.
For this purpose, AXA's RTM approach in the US assumes that markets will
return to an average gross long-term return estimate of 9% within 5 years and
with future annual gross returns limited to a 0%-15% corridor.
At 06/30/02 At 12/31/02 At 06/30/03 At 12/31/03
----------- ----------- ----------- -----------
Gross Return assumed in:
- Year 1 9% 15% 15% 5%
- Year 2 9% 15% 12% 9%
- Year 3 9% 11% 9% 9%
- Year 4 9% 9% 9% 9%
- Year 5 9% 9% 9% 9%
- --------------------------------------------------------------------------------
# of yrs above the mean
before reverting to the mean 0 2.5 1.25 0
- --------------------------------------------------------------------------------
Year 1
At the below the
mean mean
[LOGO] Full Year 2003 Earnings-Appendices-February 26, 2004-Page 8
GMDB and GMIB net reserves
at 12/31/03 vs. 12/31/02
12/31/03 12/31/03 12/31/02 12/31/03 12/31/02 12/31/03 12/31/03
Unaudited Account % Net Amount Net Amount French GAAP French GAAP U.S. GAAP U.S. GAAP
figures Value reins. at Risk(1) at Risk(1) Reserve(2) Reserve(2) Reserve(3) Reserve(3)
($ bn) ($ bn) ($ bn) ($ mm) ($ mm) ($ mn) ($ mn)
--------- -------- ------- ---------- ---------- ----------- ----------- --------- ---------
GMDB
o AXA Financial 46.4 22% 4.0 8.7 52 107 52 107
- -----------------------------------------------------------------------------------------------------------------------------------
GMIB
o AXA Financial 14.4 75% 0.1 0.3 32 35 86 118
(1) Net of reinsurance and, for GMIB, with annuity margin.
(2) Net of reinsurance.
(3) Net of Reinsurance but gross of the fair value of GMIB Reinsurance
contracts considered derivatives under SFAS No. 133 of $29 million
and $120 million at December 31, 2003 and 2003, respectively.
[LOGO] Full Year 2003 Earnings-Appendices-February 26, 2004-Page 10
Distribution of GMDB/GMIB benefit type by account value
at December 31, 2003
AXA
As a % of account value Financial
----------------------- ---------
GMDB Return of premium 58%
Ratchet (or high water mark) 12%
Rollup 17%
Higher of ratchet/roll-up or other combos 13%
- --------------------------------------------------------------------------------
GMIB Rollup 40%
Combos 60%
[LOGO] Full Year 2003 Earnings-Appendices-February 26, 2004-Page 11
AXA FINANCIAL - VARIABLE ANNUITIES BENEFITS
o We are using a variety of risk mitigation techniques including reinsurance
and more recently Dynamic Hedging on our GMDB sales since Q2'02, as well as
managing the product design
o Mitigates risk with respect to equity market performance, but
o we retain risk relative to actual vs. assumptions for: volatility,
mortality, policyholder behavior and funds performance vs. hedge
position (basis risk)
o We back tested using 10 years of actual equity and bond market returns
(1993-02) and volatility
o For ten year total and each of 40 quarters, hedging performance
produced results that would not have resulted in material gains or
losses
o GMDB and GMIB are options where exercise is triggered by:
o death for GMDB
o policyholder, after 7 to 10 year waiting period, for GMIB
o Valuation uses traditional option pricing methodology. Requires assumptions
for volatility, mortality, interest rates and surrender rates
[AXA Logo] Full Year 2003 Earnings - Appendices - February 26, 2004 - Page 12
AXA FINANCIAL - GMDB AND GMIB OPTION VALUES FOR ACCUMULATOR `02 AND `04 USING
LONG-TERM 15 YEAR FORWARD TREASURY RATE
- -----------------------------------------------------------------------------------------------------------------------------------
Option Value
Current using weighted average volatility* of:
Charge 22% 26% 32%
- -----------------------------------------------------------------------------------------------------------------------------------
GMDB ACCUMULATOR '04 NEW
Annual Ratchet 0.25% 0.12% 0.20% 0.26%
Greater of Ratchet & 6% rollup 0.60% 0.46% 0.50% 0.54%
- -----------------------------------------------------------------------------------------------------------------------------------
GMDB ACCUMULATOR '02
Annual Ratchet 0.30% 0.12% 0.20% 0.26%
Greater of Ratchet & 6% rollup 0.60% 0.46% 0.50% 0.54%
6% Rollup 0.45% 0.41% 0.45% 0.49%
- -----------------------------------------------------------------------------------------------------------------------------------
GMIB ACCUMULATOR '04 NEW
Greater of Ratchet & 6% rollup 0.65% 0.32% 0.40% 0.50%
- -----------------------------------------------------------------------------------------------------------------------------------
GMIB ACCUMULATOR '02
Greater of Ratchet & 6% rollup 0.60% 0.32% 0.40% 0.50%
- -----------------------------------------------------------------------------------------------------------------------------------
DB & IB SOLD TOGETHER - ACCUMULATOR '04 NEW
Greater of Ratchet & 6% rollup 1.25% 0.80% 0.92% 1.04%
- -----------------------------------------------------------------------------------------------------------------------------------
(*) Weighted average of S&P 500, Russell and Nasdaq.
The 22% is the weighted average of 22% volatility for S&P, 21% for Russell
and 27% for Nasdaq.
The 26% is the weighted average of 23% volatility for S&P, 30% for Russell
and 46% for Nasdaq.
The 32% is the weighted average of 29% volatility for S&P, 33% for Russell
and 52% for Nasdaq.
[AXA Logo] Full Year 2003 Earnings - Appendices - February 26, 2004 - Page 13