albert-benchimol_axis-1
28 January 2022Insurance

AXIS slashes property cat reinsurance exposure at 1.1 renewals to nurse bottom line

AXIS Capital managed an average rate increase of roughly 9% on its January reinsurance renewals, below some headline average rates as the group worked to restructure its portfolio away from property cat for greater earnings stability, officials told the Q4 earnings call.

“We took meaningful action to reshape our cat portfolio,” CEO Albert Benchimol (pictured) said of the renewal season.

Benchimol cited a 70% reduction in gross premium on aggregate treaties and a 75% reduction in low attaching treaties, leading to 45% reduction in property and property cat reinsurance premiums at 1.1 compared to the prior year.

That took the property book down by ten percentage points from 27% of the book in the year prior renewals to 17% today, he said.

Headline talk of low double-digit price gains in property hid a lot of pricing variation, officials said of the January fray. Lower layers and aggregate treaties could be up by as much as 25 to 50% if loss impacted, officials claimed. “As one moves up towards layers further removed, rate increases were more subdued.”

“I am pleased that despite this meaningful shift and reduction in cat lines, we continue to expect an improvement in technical ratios, but with much lower volatility,” Benchimol said.

AXIS Capital will press for more of its reinsurance growth from specialist lines, he indicated.

“We are more focused on the bottom line than the top line, but I think as we go through the next renewals, you should expect to see similar actions in terms of some reduction in property and property cat which we hope will be offset by growth in other lines of business,” Benchimol said.

Reinsurance market pricing, while firmer throughout 2021, continues to run behind gains enjoyed by primary carriers and upwards price pressure needs to be maintained, Benchimol insisted.

“While still running behind primary pricing, the market is heading in the right direction, but must to continue to do so to adequately compensate” reinsurers for loss rates and inflation, he 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.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
28 January 2022   Fast-rising cyber requires heightened discipline for claims volatility, even as profits remain solid.
Insurance
31 March 2022   The entity is regulated by the Central Bank of Ireland, with branches in Belgium and the UK.
Insurance
28 April 2022   The re/insurer delivered strong progress along virtually all key metrics.