Resilience in a storm: reinsurers bridge uncertainty and stability
Geopolitical upheaval, economic turbulence and climate extremes reshape reinsurers’ strategies.
Volatility is as high as ever. Geopolitics, social unrest, economic and trade disruption and the impact of pandemics on global health have escalated uncertainty to an all-time high. But managing uncertainty is what the industry was built for. These challenges mean reinsurance is more critical than ever.
So says Renaud Guidée, chief executive officer, AXA XL Reinsurance. Speaking during an exclusive interview with Bermuda:Re+ILS, he stressed that he sees it as the reinsurance industry's purpose to bridge the gap between volatility and the certainty and stability that clients crave. And that means the reinsurance market is more relevant than ever. Bermuda’s reinsurance market isn’t just reacting – it’s becoming more strategically vital than ever.
Guidée’s message is clear: Today’s volatility is not a temporary storm to be weathered, but a structural reality requiring strategic adaptation. And for Bermuda, with its deep capital pools, sophisticated regulatory framework and culture of innovation, this is both a challenge and an opportunity.
By combining robust balance sheets with cutting-edge analytics, disciplined underwriting and a commitment to client partnership, reinsurers like AXA XL can continue to turn uncertainty into opportunity.
“In a world that is being tested,” Guidée concludes, “our role is to stand as a source of certainty and stability. That’s what our clients expect – and that’s what we deliver.”
“I would urge everyone to take a step back and look at the broad picture.”
Softening signals
Assessing the market line-by-line, Guidée describes the picture as consistent: heightened loss activity and increased claims potential.
Property lines have seen intense activity with significant wildfires, heatwaves, floods and severe convective storms this year. It’s happening before our eyes, and we don’t need to take a wider lens.
Loss trends in casualty lines, meanwhile, are only going one way: up. In many casualty lines, litigation funding, while under increasing scrutiny, continues to fuel the flames.
Nuclear verdicts remain a key contributor: Marathon Strategies’ ‘Corporate Verdicts Go Thermonuclear 2025’ report stated a 52% increase year-on-year from 2023 to 2024 for nuclear verdicts against corporate defendants, seeing a total of 135 lawsuits, the most seen in a year since 2009. The sum total of these verdicts reached $31 billion. “Thermonuclear verdicts” – greater than $100 million – increased to a record high of 49 in 2024.
When it comes to Speciality lines, there have been tragic aviation events across many parts of the globe, be it South Korea, India or the US, and other lines are seeing similar activity.
Overall, loss activity has escalated. Demand for protection comes hand-in-hand.
Guidée emphasised the importance of having a robust, reliable, trustworthy and creditworthy reinsurer in times such as these.
Too much complacency
While some industry voices suggest early signs of softening rates in certain property classes, Guidée cautioned against mistaking short-term cycles for long-term patterns.
Volatility is high. Guidée highlighted that everyone has a shared responsibility: reinsurers, insurers, insureds, governments, regulators and financial services alike, to address the current risk landscape
Speaking to specific lines, Guidée said: “When it comes to property, I would urge everyone to take a step back and look at the broad picture; consider taking into account frequency and severity of perils over the past decade.
“The underlying reality we have to face, and which prompts indemnification, is that perils happen more often and with a greater impact.”
For Bermuda’s reinsurers, these trends underscore the importance of disciplined underwriting and a focus on sustainable pricing across the cycle.
Delivering for demand
While opportunities for growth seem abundant due to global instabilities, Guidée explained that, for AXA XL Reinsurance, strategy is all seated in what its clients need.
He said: “We are positioned as a trusted business partner to our clients, which enables us to understand their needs and where we can be most helpful and impactful to them. I wouldn't make a generic statement about where I see growth opportunities because, for us, it’s about getting in the tent with our clients and working together to best address their needs.”
What Guidée emphasised most was that the reinsurance market is now calculating price and rate for risks that were unthinkable, just five years ago. Innovation is key to staying ahead of evolving risk.
Guidée identifies the key to innovation for AXA XL Reinsurance as gaining better knowledge, improving modelling and looking more deeply into emerging threats, all of which boil down to data. The more data available to reinsurers, the better equipped they can be to serve tailored solutions according to needs.
Risk diversification
Guidée explained that risk diversification and a robust balance sheet are also key.
Guidée said: “We diversify across regions and across perils, working with best-in-class cedants to make sure that, regardless of intensity or severity, we will be one of the players standing and living up to our commitments to pay out claims to our clients”.
For systemic threats, Guidée explained that their investment in knowledge, really digging in to understand the risk, is what guides their ability to provide the right cover at the right price. This is why, as well as investing in its own teams, AXA XL partners with academic institutions to study resilience and recovery.
A key finding from the Cambridge Centre for Risk Studies research in partnership with AXA XL Reinsurance is that the more insurance penetrates the economy and society, the faster the recovery post an event.
Guidée explained: “The research found that, when you divide property and casualty premiums by the gross domestic product of a given country, if that ratio increases by one percentage point, on average, the period required to recover from a major disaster goes down by one year.
“That can make a massive difference to the impacted communities. When schools are destroyed, a building burns down or hurricanes or flash flooding destroy homes, if you can rebuild in two years instead of three, or three years instead of four, it does make a difference, so that is added value insurance can provide to our communities.”
For Bermuda, with its deep ties to catastrophe reinsurance and its growing role in parametric and innovative structures, such research reinforces the industry’s broader societal value.
Culture eats strategy for breakfast
Speaking more broadly to his leadership experience across his career, in his current role as CEO of AXA XL Reinsurance and as Group Chief Risk Officer for the whole of AXA prior, and at Goldman Sachs as managing director before joining AXA, Guidée explained that, while strategic vision is the compass to point out where you are headed, how you get there is even more critical. Strategic vision stands as the first pillar, but “corporate culture eats strategy for breakfast”, and is vital for concrete action.
Culture drives team motivation, and team spirit is another aspect that Guidée cites as a learning throughout his journey. The team turns the wheel that delivers the strategy.
“As a leader, I want to offer our teams and upcoming talent the opportunity to grow their potential. I always encourage skill expansion and investment in oneself. A large part of this comes down to culture, building an environment where ideas can be shared and tested within a supportive team. Valuable individual contributions better the collective outcome; that needs to be understood across the entire team,” Guidée said.
“Reinsurance touches every aspect of our lives and is the backstop of what happens in the economy and in society. It is an enabler of growth and innovation, protecting what matters most. Knowing that insurance is not just a way to earn a living, but a way to make a difference, is a key driver for many.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
