AXA XL has almost right-sized property cat, AXA estimates €200m hurricane Otis loss

AXA XL, the commercial insurance and reinsurance arm of the AXA Group, has almost completed the process of rightsizing its property catastrophe reinsurance exposure, resulting in a slight decline in premiums for the business to date This year.

AXA XL has reduced its natural catastrophe risks, while leveraging its third-party capital activities within the AXA XL ILS Capital Management business unit, with the aim of reducing the volatility of its results while continuing to share risks with third-party investors.

After presenting AXA Group’s results for the first nine months of the year, Alban de Mailly Nesle, AXA Chief Financial Officer, said that adjustments to the appetite for catastrophe risk are almost complete for the company .

“The resizing of our non-priority activities is now almost complete in catastrophe property reinsurance, traditional G/A savings and certain international group health contracts,” he explained.

Since the start of the year, reduced exposure to natural catastrophes at AXA XL Reinsurance has slightly reduced gross written premiums, the company said.

The natural catastrophe business continues to present challenges, the company said, but there is evidence that reducing retained property catastrophe reinsurance risk is paying off.

In total, AXA XL Reinsurance premiums decreased by 3% to €2.1 billion, AXA said, due to lower premiums in Catastrophe Property reflecting the reduction in exposure in this sector, which is in line with the Group’s strategy.

Despite a high natural catastrophe experience in the third quarter, AXA said the group’s result was still on track to be within its budgeted combined ratio.

The company also disclosed an estimate of AXA Group’s losses in Mexico following the passage of the recent Hurricane Otis in October in the Acapulco region.

At present, AXA has indicated that it estimates the loss linked to Hurricane Otis at approximately 200 million euros before taxes and excluding reinsurance.

Properly sizing property catastrophe reinsurance within the AXA XL business has been an ongoing task for several years now and the AXA XL ILS unit has played a key role in identifying areas of risk to retain , share and abandon, as he builds what he sees as a better performing book with less volatility moving forward.