New business from China and India will dominate the growth of Axa's Asian operation in 2008, according Axa group chief executive Andrew Penn.

Penn said the group is well placed to take advantage of the world's fastest growing insurance and wealth management markets.

"We have also developed a significant and broad distribution footprint in India and are well positioned for growth in this dramatically growing market, which doubled in the last year," he said.

"In China we now have access to 34 per cent of the market through our five existing branch licenses and the recently approved licenses for Dongguan and Jiangsu province."

Axa Asia Pacific Holdings (AXA) reported that net profit after tax was down four per cent, to $638.7 million, for the 12 months to December 31, from $667.7 million in the previous corresponding period.

The group's second-half profit slumped 27 percent, as falling financial markets cut investment earnings.

However, profit after tax, before investment experience and non-recurring items, was up 12 per to $604.8 million, with operating earnings increasing 20 per cent to $543.7 million. 

Strong growth for Australia and New Zealand's wealth management businesses saw operating earnings for the region up 16 per cent to $284.4 million, with the value of new business growing 35 per cent to $192.9 million.

Australian wealth management operating earnings were up 15 per cent to $83.5, from $63.2 the previous year.

"In Australia and New Zealand, 2007 featured the confluence of strong investment markets and a number of favourable regulatory changes," Penn said.

"Axa is a strong and resilient business and is well positioned to capitalise on the inevitable opportunities that will arise as a result of the current market volatility."

Axa's share price rose 8.6 per cent to $5.86 yesterday, however it has fallen from around $8 in December.