AXA XL secures its first personal auto alternative capital transaction with Bluefire Insurance

AXA XL Reinsurance in Bermuda has completed an alternative capital reinsurance transaction with Bluefire Insurance, a Texas based Managing General Agency (MGA).

The deal sees Bluefire assume risk from its personal auto portfolio through a collateralised reinsurance agreement with AXA XL. It is the first personal auto alternative capital transaction that AXA XL has completed in Bermuda, and the first risk taking position Bluefire has taken on its own business.

AXA XL and Bluefire's partnership dates back to 2014 and strengthened in 2019 when Bluefire consolidated its carrier assortment and moved its reinsurance buying to a portfolio basis.

Jamie Pooley, head of strategy at Bluefire Insurance, described its book of business as “diverse and stable”, with “significant scale that is delivering consistent and predictable returns to our reinsurance partners."

Bluefire has been exploring ways to reinsure its own business, said Pooley, noting efficiency challenges around casualty quota share reinsurance agreements that have an exposure duration. The bespoke structure it designed with AXA XL overcome these challenges, he said.

Paul Simons, head of property, global markets and head of Bermuda reinsurance at AXA XL, added: "While most of our alternative capital solutions have been in the property catastrophe space, this transaction demonstrates our willingness and ability to provide alternative offerings in casualty and other lines of business."

AXA XL was advised by Walkers Bermuda, while Bluefire was advised by Foley & Lardner.