AXIS eyes top 10 spot
Albert Benchimol, president and chief executive officer at AXIS Capital, is increasingly confident that the company is well placed to thrive in the current reinsurance market—although he stresses it is not a hard market—and become a top 10 player by gross written premiums. “Now is our time,” Benchimol says positively.
Over the past 18 months the company has been busy restructuring its business, focusing on the areas in which it believes it is relevant and is particularly strong—and pulling back from the lines where it is not.
“It isn’t possible to do everything,” Benchimol says. “We have pulled back from some lines where we aren’t strong, such as Australian property, excess casualty and energy.
“That allows us to focus on areas where we can add value for our clients, such as renewables where we are one of the biggest underwriters globally, cyber where we are top five, and credit and political risk.”
According to Benchimol, AXIS also felt that it was under-represented in the London market. It acquired Novae in 2017 for more than $600 million, creating a $2 billion player in the London specialty market in the process.
This also made it a top 10 player in London, allowing it to invest in the market and benefit from some of the recent changes in the market.
“Our position in the market has been focused, we have invested in technology, analytics and digital, and we’ve invested in talent, bringing in some great people,” he says.
As a result, Benchimol believes, AXIS is in a good place in London for the future.
Growing AXIS Re
He’s particularly proud of where the company is with regard to reinsurance. He acknowledges that, historically, AXIS Re has been a respected broker market participant, certainly making the top 15. However, he says, under Steve Arora’s leadership the company has focused its efforts and raised its ambitions.
Arora became chief executive officer of AXIS Re in October 2017. He says that although AXIS Re remains just outside the top 10 global reinsurers, the company is focused on breaking into that group.
“We are repositioning ourselves to be more client-centric, because this business is all about how you interact with your clients,” says Arora.
“For example, we are very proud of our claims performance. Globally, on average, we make our payments in five business days, and that increases customer satisfaction.”
AXIS is pushing this ambition forward against a backdrop of what some have described as the early stages of a hard market—potentially meaning that a good period for AXIS Re lies ahead. Benchimol, however, is sceptical about this—he believes selecting the right lines and being tough on price is as important as ever.
“This is not a hard market,” he says. “You have to select your spots—you have to know what to write. Thinking about markets in terms of being ‘hard’ and ‘soft’ is no longer useful. This is an underwriter’s market, a disciplined market, a correcting market.”
Despite this, Benchimol and Arora are both optimistic that AXIS as a whole can benefit from the present state of the market—as well as the overall big picture.
As Benchimol puts it: “This is a new era for reinsurance, these are tough times, but also exciting times.
“There is a lot of economic volatility, driven by geopolitical risk and by protection gaps, climate risk, changing client portfolios and advances in technology. Our job is to be more responsive to all those changes.
“You have to focus on what you’re good at and what your customers think you’re good at. If the market is doing well and we’re not, that’s our fault.
“If the market isn’t doing well, then you need to decide if that market is ever going to turn—and if it’s not, why are we bothering there when there are other areas where we can be focusing our energies and creating more value for our customers?” he says.
Devil in the detail
The key to success in this market, as Benchimol and Arora underline, is execution.
“It is easy for a reinsurer to say it wants to be more agile, the difficult thing is executing on that,” Arora explains. “How we do that is by having a clear vision, disciplined risk management and a strong performance culture.”
Arora feels that there is rapid change in the reinsurance market at the moment, and that it requires a different style of reinsurer to be successful in the future as standards are being raised across the board in how companies interact with clients. He reiterates that AXIS Re has already invested in key metrics to meet those changing standards.
Both executives underline the fact that increased access to data has given companies a more granular view of their own performance, allowing them to better analyse where they are profitable and where they are not.
This means companies can respond to mis-pricings in risk in individual lines, rather than repricing all businesses because of challenges in specific areas—such as a couple of bad hurricane seasons.
According to Benchimol, the personal lines and life insurance lines have done a good job of analysing the data that is available and have been adjusting their business accordingly. Specialty lines are now starting to catch up.
However, as he points out, the speciality market can learn from the mistakes made in the past by personal lines and life insurance, allowing them to avoid those errors and focus on the path ahead—a path that leads to the same message that he and Arora underline all the way through their comments: that for AXIS, now is its time.