AXA XL Reinsurance appoints Bermuda CEO
Nancy Bewlay, CEO, AXA XL Reinsurance.
Nancy Bewlay of AXA XL Reinsurance has learned from the best. Here, she explains why that means understanding the need to nurture talent, why understanding climate change is vital and why she is eyeing opportunities in the casualty space.
Nancy Bewlay, chief executive officer of AXA XL Reinsurance, has a long to-do list. She took the reins of her current role from Charles Cooper in March this year and subsequently relocated to Bermuda. Underwriting a profitable book of business that adds value to parent AXA Group is top of that list. But a close second, which she sees as integral to the business’s future, is her commitment to talent—and that is good news for Bermuda.
Bewlay learned from the best. Her extraordinary CV shows that she has learned from not one but four industry legends: Warren Buffett, Hank Greenberg, Bill Berkley and Mike McGavick have all been her boss/mentor at one time or another. And that is without mentioning a key part of her career as head of underwriting for casualty, North America at Swiss Re.
Those experiences have shaped her. A common theme of great leaders, Bewlay believes, is their ability to attract the best people and get the best from them. In the context of AXA XL Reinsurance in Bermuda, this also means ensuring it develops a strong pipeline of local talent.
“We are a Bermuda re/insurer. We have been here for more than 35 years, but to succeed in the future we need to continue to develop our talent based in Bermuda. That is important to the business but also a responsibility for the industry as a whole,” she says.
“We need to ensure we’re pulling that talent in from Bermuda. That means continuing to engage with schools directly and through our leading involvement in the Association of Bermuda International Companies and the Bermuda Foundation for Insurance Studies, so that the young ones understand what options there are and have the opportunity to build meaningful careers on the Island.
“This commitment to attracting, developing and promoting talent represents a core ethos of the wider AXA Group. It was further enhanced and developed during the COVID-19 pandemic. This prompted the company to reassess its priorities and make changes that have endured in the post-pandemic era.”
Bewlay explains: “The company transitioned during and post-COVID-19. I was very proud of the way we quickly adapted. The business proved itself to be very resilient. We adapted and continued to do our jobs remotely, and the company focused on the health and wellbeing of its people during that time.
“It was a real cultural shift that required a lot of employee engagement. We gave our leaders the tools to lead during the crisis. We found that people’s personal connections to the organisation grew because we obviously cared about our colleagues. Our business strategy is to protect what matters and I think it just accelerated our strategic thinking as an organisation to place even more importance on that.”
Now, this ethos has gone to new levels. As part of AXA Group the business has adopted “Smart Working” which provides flexibility to employees to work in the office and remotely.
There is a much more robust commitment to inclusivity, with business resource groups on everything from historically under-represented racial and ethnic groups and disability to LGBTQ+ pride, which Bewlay co-leads.
“The focus is on engaging with people to attract and keep the best talent,” she explains. “We listen to our employees and understand that the best talent comes from all walks of life. We want to make sure our employee base represents society, we want to recruit from 100 percent of society.
“We want people to bring their whole selves to work and we believe this will give us a long-term business advantage. You can’t create products for communities you don’t understand or serve. So, we’re staring at ourselves in the mirror quite closely and adapting.”
“We’re staring at ourselves in the mirror quite closely and adapting.”
This is good news for Bermuda. AXA XL Reinsurance has been based there since 1992, and while Bewlay stresses the need to focus on finding and retaining talent in Bermuda, there are many other reasons it represents home for a reinsurer such as AXA XL.
Top of that list, says Bewlay, who has worked in and around Bermuda for 25 years and is now resident there, is the regulator, the Bermuda Monetary Authority. “It is a globally responsible regulator in this space. In addition to this, there’s a strong reinsurance presence in Bermuda, which means it’s serviced well by the broker community.
“We do some direct business, but we mainly work with broker partners. Bermuda is a hub of reinsurance—a central place where business is transacted on a daily basis but also where innovation happens. People come to Bermuda to table topics. It’s a very dynamic environment. The concentration of talent in such a small place is extraordinary and it is a great place to be based as a result.”
Bewlay sees that her role as head of AXA XL Re is to add value to the AXA Group by offering diversification and stable results. “Our job is to bring consistent results to AXA that diversify the portfolio. The question is ‘who do we reinsure that can help the entire AXA portfolio to move towards that ideal global portfolio that is a combination of personal lines, commercial lines, and reinsurance?’,” she says.
That role, she argues, is in some ways made easier by having AXA as a parent. She describes AXA XL Reinsurance as a solid tier two reinsurer. But while it is not comparable to the likes of Swiss Re and Munich Re, with its parent’s support it can match them in terms of the overall balance sheet, financial strength, expertise and reach into different markets around the world.
“My job is to translate that brand and strong financials into opportunity in reinsurance,” she says. “We are a stable partner offering consistent returns. We conduct responsible financial planning and construct a portfolio that is purposeful. We have expertise in property, property cat, and casualty—all the long tail lines—and we have a nice portfolio of credit and surety business, marine and aviation.
“We have expertise in all those areas. Our clients matter. We invest in long-term relationships. We have worked with some clients for 30-plus years. We still pay claims 30 years later. In addition, we’re very committed to data and analytics, which are some of the best I have seen in my career,” Bewlay says.
“Finally, we are a completely global company. We have strategic locations where we need to be. The world is different everywhere. You have issues in certain parts of the world that are non-existent in others. Each market operates differently. The protection gap is wider in some places than others. That local knowledge gives us an edge.”
“We are a completely global company.”
The need for knowledge
The business has invested heavily in climate science in recent years, including through a partnership with the Cambridge Centre for Risk Studies. Bewlay believes reinsurers cannot offer a truly long-term perspective without getting a handle on this issue. “You cannot be a sustainable partner without this insight,” she says. “We’re looking at how we price risk, how we share our risk insights, and we believe we’re building something for the future.”
Describing herself as “naturally technical by nature” Bewlay’s approach segues nicely with one of the most pertinent challenges the industry is facing: a contraction of capacity in the property-cat space. A combination of unexpected losses and perils and a fear of the impact of climate change has spooked many players in the market.
Not Bewlay, however. The lack of capacity has resulted in some of the best underwriting conditions seen recently. Instead, she eyes an opportunity for reinsurers able and willing to operate in that space.
She admits that property-cat can be a “tricky space” and stresses the business will not accept too much volatility. But she is clear that competent and experienced players in this space, such as AXA XL Re, can reap the rewards of the cycle.
“We are still a big provider of nat cat capacity; there has been a big loss of capacity in that market, so we do see growth potential,” she says. “We manage our cat book carefully and strategically deploy our capital with a view on controlling our nat cat volatility.
“A capacity drain has meant there isn’t enough capacity for the primary market. Markets that would have had 150 percent on a placement last year are struggling to get 100 percent. In places such as Florida, it is even worse.
“It’s a tricky space but for those of us who have remained, there is certainly an opportunity to look at the risks in the market and charge an adequate price that reflects the exposure,” she explains.
On one level, Bewlay regards writing property-cat business as part of the industry’s challenge as the world grapples with climate change. The company has invested heavily in recent years in data and applying science to the way in which global warming will affect risk. She also sees opportunity in reinsuring climate-related products and services being developed.
“As primary insurers move into that space, that also means an opportunity for reinsurers,” she says.
In addition to these potential growth areas, she sees growth in other areas where capacity is needed: in the manmade cat space and in lines impacted by the Ukraine-Russia war, including marine, energy and aviation.
Ultimately, in all lines of business, she argues, it is a question of knowing where you are in the cycle, something which is often truly possible at an industry level only with hindsight. But individual businesses must establish their own view based on their own portfolio, she believes.
“Cycle management is always knowing where you are in the cycle and defining it for yourself. My property team will tell you this is the best cat market they’ve seen since 2006. In US professional lines, it is different. After a two-year incline in rates, we are now seeing a flattening. So, it just depends on where you are in each line of business based on your own benchmarks,” Bewlay says.
“This is an industry based on relationships. We know how much capacity we want to put into that market and who our best clients are. We’re always open to new clients as well, but that will be a big discussion in the context of the capacity constraints we are seeing.”
Such caution, she notes, is understandable, given the events of recent years. The industry has endured not one but two so-called black swan events in recent years: the COVID-19 pandemic and a frequency of catastrophe events that was beyond anything the risk models predicted.
“We had Australian floods, French hailstorms, more wildfires—the uncertainty continues. People ask: ‘Is this the new normal?’.
“I think the industry is remaining disciplined because we have had these two black swans. If, five years ago, you were doing your scenario modelling, you would never have predicted that. So, the industry has been surprised. Uncertainty remains which is driving discipline,” she concludes.
AXA XL, Nancy Bewlay