AXA XL saw reinsurance renewal price increases rise 50% YoY

AXA XL, the commercial property & casualty insurance and reinsurance arm of the AXA Group, saw a significant increase in prices at the January 2021 reinsurance renewals, compared to price increases a year earlier.

In reporting the AXA Group results this morning, the France headquartered global insurance and reinsurance company provides some insight into its commercial business under AXA XL and noted that, for the company, the January renewals saw much higher reinsurance price increases than the prior year.

First, the commercial insurance business though, which has been flying for AXA.

AXA XL Insurance was the main driver of commercial underwriting revenue growth in 2020, with favourable pricing throughout the year and that accelerated into Q4.

The company said that commercial insurance price increases were +17% for the year in 2020, but +22% in the fourth-quarter.

The AXA XL Reinsurance segment could not boast such significant price rises, but year-on-year the increases were still impressive.

For the full-year 2020, AXA XL Reinsurance saw price increases on renewals of +7%.

At the key January 2021 reinsurance renewals, AXA XL booked price increases of +9%, some 50% higher than the January 2020 renewals +6% price increases.

It’s a good way to look at risk-adjusted profitability of the book underwritten and as ever these figures read-across positively for the entire reinsurance space, as well as for insurance-linked securities (ILS) funds and investors, plus the catastrophe bond market.

Despite the impacts of the COVID-19 pandemic, AXA XL has reported a 3% increase in property and casualty revenues, to EUR 18.53bn, across the insurance and reinsurance business for 2020.

However, underlying P&C earnings at AXA XL were down significantly at EUR -1.313bn.

This was driven by COVID-19 claims, with business interruption and event cancellation the main drivers, as well as higher natural catastrophe losses at AXA XL.

Price increases secured at the renewals position the AXA XL reinsurance book well for 2021, but the ongoing impacts of the pandemic may drive its profit potential, as well as the potential for catastrophes throughout the year ahead.