Axa, Europe's third-largest insurer, added its name to the growing list of insurance groups cutting their dividend, despite revealing a 10 per cent rise in underlying earnings, ahead of analysts' expectations.

France's largest insurer, which is a major operator in Ireland, proposed a dividend cut of nearly 40 per cent, to €0.34 per share, down from €0.56 per share last year.

Axa chief executive Mr Henri de Castries defended the decision to cut the dividend, which he said would save about €500 million and help the firm avoid needing to raise funds on the market.

Shares in Axa, which have lost a quarter of their value this year, were up 1.2 per cent at €10.41 yesterday. Mr de Castries said the slide in the company's shares had reached "absurd" levels.

Net profits rose 82 per cent to €949 million, boosted by exceptional gains from the sale of Axa's Australian health business and the change in accounting of its acquisition of Sanford Bernstein.

However, the group estimated its net loss would be about €1. 6 billion under US GAAP accounting rules.

 - (Financial Times Service)