Shares in Axa, Europe's second biggest insurer, rose by more than five per cent today after saying it could defy sliding performance across the insurance sector to match its record full-year earnings of 2007.

Despite reporting a 32 per cent fall in first-half net profit to €2.16 billion (£1.7 billion), the market welcomed the Axa result, which was delivered against the backdrop of a profit warning by rival Allianz today.

Allianz, Europe's biggest insurer, abandoned its earnings growth forecast after losses at Dresdner Bank led to a 29 per cent fall in second-quarter profit.

While Allianz shares fell by 3.5 per cent, money flowed into Axa, pushing the stock 5.5% higher to €21.5.

Paris-based Axa said underlying profit rose by 7 per cent to €2.77 billion, reflecting a strong performance by the damage insurance division in the six months to June 30. The division notched profit growth of 18 per cent on fewer claims relating to natural disasters.

Operating earnings at Axa's life and savings unit fell 6 per cent to €1.4 billion, a shade above market forecasts.

Axa said overall group sales fell by 2.9 per cent to €49.32 billion.

In the UK and Ireland, underlying earnings increased by 14 per cent from £160 million in the first six months of 2007 to £183 million.

Henri de Castries, chairman of Axa, described the result as "robust in a turbulent market environment". "Axa's business strategy is built to withstand severe economic conditions and we remain well positioned to benefit from any upturn in the market environment," he said.

"Total first-half revenues were stable despite a momentum slowdown in life and savings and asset management. However, all business lines generated positive net inflows with notably increased retention in life and savings."

Axa said operating profit for the year should be in line with its target of the record achieved last year of €4.963 billion.

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