AXA XL enters alternative capital reinsurance deal with Bluefire

AXA XL Reinsurance in Bermuda and Texas-based managing general agency (MGA) Bluefire Insurance have entered into an alternative capital reinsurance transaction.

As part of the agreement, Bluefire will assume risk from its personal auto portfolio through a collateralised reinsurance agreement with AXA XL.

The transaction represents Bluefire's first personal auto alternative capital transaction that AXA XL has completed in Bermuda.

AXA XL and Bluefire have collaborated since 2014, and in 2019 Bluefire consolidated their carrier assortment and moved their reinsurance buying to a portfolio basis.

Paul Simons, head of property, global markets and head of Bermuda reinsurance at AXA XL, said: "AXA XL Reinsurance is pleased to partner with Bluefire on this transaction. As a leading global reinsurer with experience in both the traditional and alternative capital markets, we offer customized, innovative solutions across a broad product offering. While most of our alternative capital solutions have been in the property catastrophe space, this transaction demonstrates our willingness and ability to provide alternative offerings in casualty and other lines of business."

Jamie Pooley, head of strategy at Bluefire Insurance, said: "Bluefire has a diverse and stable book of business with significant scale that is delivering consistent and predictable returns to our reinsurance partners. We have been exploring ways to reinsure our own business for some time but casualty quota share reinsurance agreements have an exposure duration which presents capital efficiency challenges. Once we explained our intent to take risk with the team at AXA XL, we collaborated to design a bespoke structure that met both parties' objectives. We are delighted to have expanded and further aligned our relationship with AXA XL while creating a capital efficient mechanism that captures the results we are producing."