Launch of the AXA-EIEF Chair on Household finance and insurance

March 19, 2012

Rome - The AXA Research Fund, a global initiative of scientific philanthropy supported by the worldwide insurance group AXA, is awarding 500,000 Euros as seed money to the Einaudi Institute for Economics and Finance (EIEF) to create a Chair on Household finance and insurance, held by Prof Luigi Guiso. This will be the first AXA Chair in Italy.

Without trust, the economy would, in the end, fail to work. Trust is in particular crucial when someone chooses to buy an insurance product or to invest in a corporation's stock. What is more the recent times have shown that the collapse in trust can lead to severe tensions in the loan system. Professor Guiso believes that the importance of trust has been underplayed in economics and especially in finance. By bringing trust back to the attention of economists, his research shows that trust and beliefs matter considerably for people’s reliance on financial instruments and for the development of financial markets. Trust is even more important for households, because, lacking knowledge and information, they often need to rely on it when asking for advice to make their financial decisions. That is why expanding existing models of households financial decisions to allow for diversity in peoples beliefs towards other people behavior, along with differences in risk attitudes, will better capture households interactions with financial markets. Professor Guiso is therefore studying new models of behavior in the face of risk and uncertainty that might take into account a richer characterization of preferences and additional dimensions of risk, including social risk.

Professor Guiso works at the Einaudi Institute for Economics and Finance (EIEF), an independent research institute created in 2008 by the Bank of Italy, which aims at producing frontier research in economics and finance, to generate ideas that could be useful in the policy debate. The AXA Research Fund decided to lend its support to this highly ambitious strategy.

Prof Luigi Guiso, Chair holder declared: “There are a number of features that I consider extremely valuable in AXA’s funding scheme. Selection criteria are based solely on academic merit, and AXA is extremely respectful of the research freedom of the beneficiary of the funds, while monitoring the use of these funds. All these elements are key features for successful funding because they provide the right incentives to the researchers involved”.

Commenting on AXA’s commitment to this Chair, Frédéric de Courtois, AXA MPS CEO and sponsor of the Chair, said: “The launch of this Chair at EIEF is a concrete example of AXA’s commitment to risk research and education. Risk management, the core of our business, is also a key pillar of economic development and the private sector must play an important role in advancing knowledge of the field, promoting, in line with its larger social responsibilities, meaningful academic research as an investment for the future. The ambitious research project conducted under the Chair will contribute to stimulate and advance the public debate on key topics, related to the role of financial literacy and the regulation of intermediaries offering financial products to households. We are also proud to announce this new concrete initiative in Italy, a sign of attention towards the country of origin of mecenatism. Today Italy lacks funds for research but is rich of talents whose promotion is key for the future of the country”.

About the AXA Research Fund

Created in 2008, the AXA Research Fund (AXA RF) provides philanthropic support for research focused on understanding and preventing the risks threatening the environment, human life and our societies. As of February 1st, 2012, Euro 76 million have been committed and the AXA RF has given its support to 289 research projects, implemented in 24 countries by researchers of 47 nationalities. In Italy and for Italian researchers, it has so far committed a sum of Euro 3.5 million for various projects. The funds are granted based on a decision by the Scientific Board. By supporting top-tier researchers working on risks all over the world and helping them to share their discoveries, AXA RF tries to enrich the public debate and AXA’s own expertise with academic knowledge. Through research philanthropic sponsorship, AXA aims to foster a safer and stronger society over the long term. More details about the AXA Research Fund, including presentation of the funding vehicles, guidelines and biographies of the Scientific Board members, are available on the website www.axa-research.org.

About the AXA Group

The AXA Group is a worldwide leader in insurance and asset management serving 101 million clients. For full year 2011, IFRS revenues amounted to Euro 86.1 billion and IFRS underlying earnings to Euro 3.9 billion. AXA had Euro 1,079 billion in assets under management as of December 31, 2011.

The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISIN FR0000120628 – Bloomberg: CS FP – Reuters: AXAF.PA). AXA’s American Depositary Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.

About Einaudi Institute for Economics and Finance (EIEF)

The Einaudi Institute for Economics and Finance (EIEF, www.eief.it) is an independent research institute, created in 2008 by the Bank of Italy. EIEF aims to produce frontier research in economics and finance, to generate ideas that can be useful in the policy debate. It offers a research environment that, adopting the standards of the best international academia, helps reversing Italy’s “brain drain”, by attracting both the best foreign scholars and Italian scholars trained abroad to come back to Italy. EIEF also aims to complement the programs offered by Italian universities, focusing on graduate researchoriented courses and on supervision of selected PhD students.

About Prof Luigi Guiso, Chair holder

Luigi Guiso is full professor at the Einaudi Institute for Economics and Finance since January 2012. He has moved to EIEF to take the AXA chair in Household Finance and Insurance form the European University Institute. He has directed for five years the Finance Programme at CEPR of which he is a fellow. Luigi Guiso obtained a Msc in Economics at the London School of Economics (1980) and Mphil in Economics at University of Essex (1982). He has been visiting professor at the London School of Economics and Imperial College in London and has held teaching positions at the University of Rome and at the University of Chicago, Graduate School of Business, besides those at the European University Institute. He is a recipient of several publishing awards. Luigi Guiso has broad research interests. Besides his work in the field of households finance he has contributed research in the field of labor economics, firms investment and financial decisions, entrepreneurship and banking, political economy and institutions and in the recent field of culture and economics. His research has been published in the major scholarly journal such as the Review of Economic Studies, the Journal of Monetary Economics, the Quarterly Journal of Economics, the Journal of Political Economy, and the American Economic Review.

About AXA in Italy

AXA is present throughout Italy in a multi-distribution perspective. AXA Assicurazioni (www.axa.it) operates throughout a network of about 700 agencies and distributes its insurance and financial products providing ad hoc consulting service to ensure a complete protection. AXA MPS (www.axa-mps.it), the strategic partnership established in 2007 with Montepaschi banking group, distributes its insurance solutions through over 3000 branches in Italy, setting itself as a comprehensive “service company”. AXA is also present with further insurance companies, that include Quixa, a direct company of new generation, and the specialized entities AXA Art (protection of cultural heritage), AXA Corporate Solutions (large corporations and groups), AXA Assistance (assistance in different sectors), as well as AXA IM (asset management), AXA Private Equity (private equity operations) and AXA REIM (real estate investment management).

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