AXA XL to slash nat cat at reinsurance unit 35% to hold line for group

Reinsurer  AXA XL Re will slash its nat cat exposure by another 35% in 2023 to help its parent group hold the line on natural catastrophe net exposures otherwise driven north by inflation and a tight reinsurance market, top officials have declared.

“We’ve decided that we will reduce significantly again in 2023 the cat exposure of AXA XL Re by about 35%,” deputy CEO Frédéric de Courtois told his company’s Q4 earnings call.

For the group, that should hold the increase in average expected nat cat charges for the group, net of reinsurance, to a marginal bump towards €2 billion, or 4 ratio points in 2023 from €1.9 billion or 3.76 points in 2022, de Courtois said.

“And we are happy with this,” de Courtois added.

The logic: what inflation and reduced reinsurance cover have added to the group nat cat budget, AXA XL Re must remove, he indicated.

The end of AXA XL’s and the AXA group’s retreat from nat cat may nonetheless be within sight, CEO Thomas Buberl suggested.

“After six years we are towards the end of this exercise of cleaning up and restructuring, so we should expect that this rightsizing of shrinking businesses that are less core for us, be it nat cat reinsurance or traditional general accounts, this should be largely done by the end of 2023,” he told the Q4 call.

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