AXA takes rate to beat inflation across board for new 2023 margin

Global insurance group  AXA is taking rate at a pace to beat the impact of inflation across nearly all of its lines, giving potential for a firming of basic underlying margins, the group’s CFO has argued.

“The pricing environment is supportive and overall, I believe that yes, there is room for improvement in our undiscounted combined ratio,” CFO Alban de Mailly Nesle (pictured) told his company’s Q1 earnings call. “Everything else being equal and leaving aside cat volatility, I think it is supportive.”

“Everywhere we have seen price increases that were sufficient to offset, or more than offset inflation,” he said.

North American professional lines were the exception. AXA, like others, has seen “significant competition” lead to a softening of rates. “That said, the line is still very profitable even with that kind of price pressure.”

Automotive lines have been central to much of the market’s inflation fears as parts and repair costs offered some of the most pricey peaks of 2022 and 2023. Mailly Nesle played down the fears, citing 7% inflation for automotive across markets, higher rate gains and frequency that has averaged out to a neutral impact across markets.

The UK motor market got called out for “remarkable” rate growth “north of 25%” to help margins recuperate. “The business that we write today is profitable, which was not the case last year,” the CFO said.

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