Reinsurance must move beyond price at Baden-Baden, says Axa XL Reinsurance’s Romagne

Bertrand Romagne, CEO International, at Axa XL Reinsurance, says renewal talks this year will be more balanced and about partnership as much as price.

Key points:
Reinsurance is growth enabler
Factors reshaping risk conversations
Treat secondary perils as core risks

Reinsurance is a way for clients to grow. For Bertrand Romagne, CEO International  at Axa XL Reinsurance, that principle will frame discussions at Baden-Baden this year. 

“For me, reinsurance is a way to enable our clients to grow their business..” 

Renewal season, he told Baden-Baden Today, concerns more than rate: it’s about listening, partnering and finding solutions that help cedants manage volatility sustainably. 

“What is important for me is really the discussion between the client and reinsurers, Romagne said. “Reinsurance is a way for our clients to do more business. It’s more than just a transfer of risk,.”

Heading into Baden-Baden, he expects conversations to feel more balanced than in recent times. “In the last two or three years, reinsurers were often imposing their views,” he noted. “This year, I expect discussions will be on more of an equal footing. Capacity is available, the market is recovering.”

Outcomes, however, will differ by line of business, and Romagne predicted there would still be a lot of focus on catastrophe cover. 

“But catastrophe is only part of our global portfolio. Casualty, aviation, marine, credit and surety are all just as important, each with its own technical issues.”

He highlighted social inflation and litigation in casualty, as well as the clarity now emerging around losses in aviation and marine. “I don’t expect capacity in the market to be in short supply,” he added. “Our appetite is unchanged from last year, but we will always assess case by case.”

Inflation, weather volatility and geopolitics are also reshaping risk transfer. Axa XL Reinsurance, he explained, has long invested in analysing these exposures, through its collaboration with the Cambridge Centre for Risk Studies (CCRS). 

“Changing weather patterns have been on our radar for years. We need to anticipate trends, recognise risks and make clients aware,” Romagne said. Social inflation, once predominantly a US issue, is now spreading globally. Meanwhile,  we have  specialist teams on hand to track geopolitical uncertainty. “One of our strengths is being part of a group that invests heavily in emerging risks. That’s a clear benefit for our clients.”

On natural catastrophe, Romagne believes reinsurers must rethink so-called secondary perils. “The trouble is we keep saying ‘secondary’, as if they were less important. They are not,” he insisted. “Wildfire is now almost as big a risk in Europe as in the US. We’ve seen large losses in France, Spain and Greece this year. These perils should be treated as main perils.”

Axa XL Reinsurance’s wildfire research with CCRS, is focused on the US, but the findings are becoming increasingly relevant in Europe. The study found that adapted construction codes and prevention practices reduced risk dramatically, by a factor of three in some cases. Romagne emphasised it was the reinsurer’s duty to take those insights and apply them in Europe, raising awareness among cedants and insureds. 

For him, this reinforces the point that discussions with clients should not be limited to rate but must also include risk management and prevention.

After the sharp correction in reinsurance pricing two or three years ago, cedants now want conversations that go beyond the cycle, and Axa XL Reinsurance has used this period to deepen partnerships. “We have fewer lines, but the partnerships are stronger and more multi-line. It’s not just about one angle of the business, but all angles.”

He also underlined the value of experienced teams. “We have underwriters who have been with us for decades, actuaries who can deeply analyse risk and trends, and a strong balance sheet. This is what we offer when we have those meaningful conversations.”

Finally, Romagne pointed to the transformative role of data and AI, saying the first step was always to get data from the client. When relevant local data is scare or unavailable on a specific risk we have the opportunity to leverage global data for comparison. 

“The real challenge is how to price and anticipate risks we have not yet seen. That’s where creativity is required.”

AI, he believes, will play an important supporting role. “It won’t do our jobs for us. But it will help digest vast amounts of data, draw analogies and identify trends. Being part of Axa Group gives us access to teams working on these issues, and we will continue to invest. That’s something we can bring to clients at Baden-Baden and beyond.”

For more news from Baden-Baden Today, click here.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.