AXIS asset recovery underway, third rate declines – Artemis.bm

The return from reinsurance property in Bermuda capital of the insurance and reinsurance company AXIS Capital is clearly visible in its latest results, with a decrease in fees recorded by the reinsurance business, while there was also a decrease in fees from third-party partners. .

In early June it was announced that AXIS Capital’s reinsurance underwriting division AXIS Re would exit the asset recovery business, as the company continues to manage and reduce its overall volatility.

As we explained later in this article, this pullback does not affect the insurance-linked business (ILS) that operates under the AXIS ILS model, and does what continues to grow there, although I am looking at expanding the range. Risks are allocated to so-called strategic capital partners.

Accordingly, in reporting its results for the second quarter of 2022 last night, AXIS Capital reported the change in the consolidated ratio in the quarter and the first half, year on year.

The company has been focusing on improving the underwriting business, and the reinsurance segment and the company has been managing its long-term catastrophe exposure in a consistent manner.

Albert Benchimol, President and CEO of AXIS Capital, commented on the quarter and the change in the refresh strategy, “AXIS delivered another round of strong performance, continuing our year-on-year improvement strategy in the benchmark test.

“This quarter was characterized by a combined ratio of 93.4% and an operating ROE of 13.7%, and the growth of the second quarter supported the production figures for the full period of the year including the total amount written, and the total amount earned. This quarter our specialty insurance business also created employment strong with a strong 16% increase in total revenue recorded, 22% growth in total revenue recorded, and a combined ratio of 87.8%, as we continued to outperform the market.

“During the quarter we announced the exit of the Company from the lines of insurance and casualty. This completed the transition of AXIS Re to a specialist in reinsurance – with a focus on the attractive Casualty, Specialty, A & H, and Credit lines – which is compatible with Our effort to grow with less flexibility is to establish leadership in a unique environment.

“As we’ve seen, over the past six months our recruiting team’s revenue has increased by 36% and operating expenses have increased by 30% compared to the previous year. As we look to the future, we are poised in a strong market. of Wholesale and E&S we see great opportunities to drive profitable growth while delivering value to our customers and furthering our position as a leading specialist.

AXIS reported an increase in underwriting in its insurance business during the quarter and the first half, ensuring that the company continues to generate product and casualty exposure through the line.

But, in reinsurance, AXIS reported that written premiums decreased by $29 million, or 4%, which was mainly due to lower losses and product lines due to non-renewals and reduced lines.

The change in strategy will have an impact on AXIS’ ILS and third-party capital management business, of course.

But there are further changes underway in the business, with AXIS having ambitions to expand its relationships with third-party investors over time.

Currently, there is some evidence that AXIS Re has made a small change in fees from AXIS’s so-called strategic capital partners.

AXIS continued to receive payments from its third-party affiliates, but the second quarter saw a decline in payments to investors and revenue.

Reinsurance premiums paid to the so-called “strategic capital partners”, which is where third-party securities investors and insurers (ILS) are calculated, fell to $107 million in the second quarter, excluding reinsurance. wages were given to them.

This is now the third quarter in a row where the premiums paid to third party ILS investors have all come from the reinsurance business and have been falling year on year.

It seems that it is a reflection of the great tragedy of PML cutting AXIS that has happened, and the return of goods to AXIS Re.

It may take some time for the commercial sector to develop and for new third-party-supported initiatives to take place in AXIS reporting.

AXIS’ revenue from strategic capital partners also decreased, reaching $11.83 million in Q2 2022, down from approximately $15.5 million in the previous year.

For the first half, operating expenses totaled approximately $29.5 million, down slightly from H1 2021’s approximately $27.7 million.

It may take some time for the AXIS ILS system to be installed and reflected in insurance reporting.

But, considering its high quality records, AXIS will still accumulate natural disasters and cooperate with ILS investors through various institutions, to protect itself and share this type of financial risk with third-party investors. being at the core of the company, we understand.