XL’s reinsurance portfolio and access to capital markets sweeten deal for AXA
One of AXA’s many motives in buying XL Group is the reinsurance portfolio it comes with, which will offer further diversification, and also the access to the capital markets that now comes hand in hand with this.
That was according to AXA CEO Thomas Buberl speaking during a March 5 presentation on the deal. He said AXA wants to retain the reinsurance business not least because of the access to financial markets it enables.
AXA is acquiring Bermuda-based property/casualty commercial lines re/insurer XL Group for $15.3 billion (€12.4 billion) in cash.
Gregory Hendrick, XL president, property & casualty, also backed this point up by noting that a focal point of the reinsurance business is alternative capital as pension funds, sovereign funds, high net worth families want to participate in the property/catastrophe risk market.
XL Group wants to “bridge the gap between traditional reinsurance and insurance market into that alternative capital space,” Hendrick said. “Thomas and Mike (XL Group CEO Mike McGavick) see a big future on the growth of that potential. That’s one of the big things that the reinsurance operation brings to the table,” Hendrick added.
Gross premium written at XL Group’s reinsurance operations grew to $4.68 billion in 2017 from $3.98 billion in 2016. “Reinsurance has been a core part of our operations at XL almost from its very foundation,” said Hendrick.
This is just a snapshot of a longer feature on Intelligent Insurer which you can read here.
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