AXA seeks coverage in emerging markets
In the face of intense competition for business and softening rates, reinsurers are becoming more client-orientated and better at offering bespoke products—a trend welcomed by AXA’s reinsurance buyer.
Philippe Derieux, deputy chief executive officer (CEO) of AXA Global P&C and group reinsurance officer, said that the insurer is working with its reinsurance partners to buy capacity in some emerging markets as a complement to its existing coverage.
“Some reinsurers are becoming more innovative and client-facing, and we encourage others to join in,” Derieux said. “In terms of this renewals season, we will give the market the opportunity to take advantage of our increasing needs in emerging markets, which balances somewhat an optimisation of capacities bought for our entities in mature markets.”
He said that the insurer, which cedes some €950 million, has not made any big changes to its reinsurance programme because of the market conditions. But, with regard both to traditional and to alternative products such as insurance-linked securities (ILS), it adopts a realistic approach where opportunities arise.
“The bulk of our own programme does not change but of course we adapt on a pragmatic way to the market conditions,” Derieux said.
“We regularly use alternative forms of capital and optimise this each year considering the market conditions. For a couple of years, we have kept on average the same level of use.”
Like many large insurers, AXA has reduced the amount of reinsurance it buys over time—Derieux said it has constantly decreased over the last ten years. It is also a regular user of ILS, which represents around 15 percent of its cat programme.
Derieux describes AXA Global P&C as a captive reinsurance company with all the relevant functions: front office, back office, finance, HR, IT. The actuarial and modelling department has increased significantly in size over time, he notes. The reinsurance team now numbers 140 people.
Derieux was previously chief operating officer of AXA Global P&C, after having been head of the property & casualty business at AXA Winterthur from 2007 to 2010, chairman & CEO of AXA Cessions (the AXA captive reinsurer in charge of the AXA Group insurance risk management and reinsurance protections) from 1999 to 2007, and deputy chief financial officer of the AXA Group between 1996 to 1999.
