AXA considering selling XL Re - report
Global insurance group AXA is considering selling or spinning off its XL Re unit, Reuters news agency has reported.
Citing three people familiar with the matter, Reuters said AXA wants to cut its exposure to catastrophes and has been discussing strategic options for XL Re, including a possible private sale or stock market listing, said the people, who spoke on condition of anonymity.
The discussions, described by the sources as preliminary in nature and which may not ultimately lead to a transaction, come two years after the business was reported to have attracted interest from French mutual insurer Covea.
AXA, which bought XL Capital for $15 billion in 2018, declined to comment.
Reuter said events such as Hurricane Ian last year - the third costliest storm in US history - have prompted some reinsurers to stop this line of business, particularly as climate change makes it harder to evaluate risks.
But those still open for business have been able to dramatically increase the rates they charge for their services.
XL Re's Bermuda office has been shifting its focus from property catastrophe to other specialty lines, as Bermuda Re+ILS reported in May.
AXA has been trying to reduce the exposure of its AXA XL property and casualty (P&C) division - which houses XL Re - in an effort to make earnings more predictable., but said
this has caused the reinsurance business to shrink, with revenues dropping by nearly a third last year to $3.2 billion, according to AXA's 2022 accounts. The Bermuda-based unit had a book value of around $2 billion at the end of December.
The high pricing environment, along with a recent bout of deals in the sector, could provide the necessary tailwinds for AXA to exit the business altogether.
Last month, it appointed Renaud Guidee as CEO of XL Re, replacing Nancy Bewlay.
In May, American International Group agreed the sale of its reinsurance arm Validus Re for roughly $3 billion, or about 1.4 times the unit's book value.
Meanwhile, both Skyward Specialty and Fidelis Insurance Holdings have completed initial public offerings in New York since the start of the year.
Sources told Reuters last month that Hamilton Insurance Group was also considering strategic options.
