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Shares in Axa fell 3.1 per cent to €23.10 (£17.59) in early trade as the insurer's 27 per cent profit rise missed market expectations.

Underlying earnings were up 27 per cent to €4.96 billion (£3.77 billion), but a poll of analysts conducted by Reuters had forecast an average underlying profit of €4.98 billion (£3.79 billion).

Net income was up 11 per cent to €5.7 billion and the company proposed a €1.20 dividend, up 13 per cent.

Chairman Henri de Castries said: "In the context of a less favourable macroeconomic environment since the beginning of the year, Axa should achieve positive revenue and underlying earnings growth in 2008."

France-based Axa's profits were boosted by the sale of its Dutch operations, which contributed €480 million (£365.55 million) to profits.

In its outlook, Axa said 2008 has started in a less favourable environment, with very "volatile and bearish equity markets, a continuation of the liquidity crisis, concerns about a slowdown in world economic growth, lower interest rates and high credit spreads".

Axa added it should achieve positive revenue and underlying earnings growth in 2008.