A Focused Repositioning in the Market

As a specialty underwriter, AXIS has spent the past few years tightening its focus on specific lines. What prompted that decision, and how did you choose where to focus?

AXIS was formed in the aftermath of Sept. 11, 2001. Our founders saw the opportunity to bring capital at a moment in time when the industry and marketplace needed it. We have a rich heritage of being entrepreneurial and innovative. I’m hoping to build on our customer-centric culture and efficient operating capability so that we can achieve even greater relevance and predictability in our chosen markets.

From our founding, we’ve leaned into specialty underwriting expertise. And in recent years, we’ve been repositioning the business to predominantly focus on our insurance capabilities with a focused specialist reinsurance arm. We’ve begun leveraging our existing products and services across more of our geographies and accessing new customer segments. For example, we’ve started bringing our London-based products into North America like inland marine and the expansion of our U.S. renewable energy business. And we’ve repositioned our reinsurance business by focusing on core specialist lines where we’ve demonstrated relevance and leadership, such as credit, mortgage and surety.

AXIS has become more integrated as a company, which ultimately led to your taking over the role of president and CEO earlier this year. Can you talk about that integration process and where you hope to take the company?

As part of our aspiration to grow AXIS as a specialty underwriting leader, we’ve repositioned our internal mechanisms to enhance our capabilities, consistency and operational efficiency.

We have codified a number of capabilities, including our governance, which is enabling our ability to bring further data and analytic capabilities to our underwriting front end.

We’re also increasing the collaboration between all key internal stakeholders supporting the front end, whether it be claims, actuarial or operations. Our efforts are aimed at bringing the very best that we can through our tailored specialty underwriting products and services to support our customers’ and brokers’ needs. In this dynamic market, we’re helping customers turn challenges into opportunities, while leveraging specialist insurance solutions to elevate the possibilities for their business.

AXIS exited the property reinsurance market, which is seeing high premiums and reinsurance rates. Having been in this market and then exited, what do you think is going to happen there? Is there enough capacity to really cover the property market given climate change and increased severity of storms?

I don’t have a crystal ball as to whether the market will have enough supporting capital. I can tell you that our reinsurance peers are certainly grappling with these same issues that we’re fortunate our steering of the business has eliminated. We’ve chosen decidedly to make that bet on a risk transfer basis within our insurance business.

I think, clearly, the reinsurance business will continue to face important considerations not solely within the property market. Importantly, the multiple issues facing liability classes will continue to deserve much more focus, whether it be PFAS or social inflation, to name just two factors that will continue to place substantial stress on the bridge between loss cost trends and rate achievement. We’ll remain very vigilant to make certain that we’re bringing a consistent proposition to our customers and to be very clear about our appetite and tolerance of risk.

AXIS is also a leader in the cyber market. We’re seeing a little bit of stabilization in rate increases in that market and reports of increased capacity. Yet we still hear reports of ransomware claims ticking up. How do you see this market evolving?

Cyber will remain a dynamic class in measuring loss cost trends, measuring the tail exposure, and importantly, having a distinct proposition that services the different size and complexity of risks that we assume on our direct side. And inasmuch as we have seen a deceleration in rate over the last several quarters, we have seen the resurgence of ransomware matters coming into the domain. We remain vigilant and disciplined, and we’re willing to trade growth for margin.

We’re still optimistic about the class, and we still see conditions as generally executable and favorable.Cyber will remain a dynamic class in measuring loss cost trends, measuring the tail exposure, and importantly, having a distinct proposition that services the different size and complexity of risks that we assume on our direct side. And inasmuch as we have seen a deceleration in rate over the last several quarters, we have seen the resurgence of ransomware matters coming into the domain. We remain vigilant and disciplined, and we’re willing to trade growth for margin. We’re still optimistic about the class, and we still see conditions as generally executable and favorable.

In terms of innovation and product, is there a particular market or technology or capacity provider or combination of those that you think might be able to address some of the more challenging systemic risks that you’ve discussed?

I think artificial intelligence, or AI, certainly will play an important and critical role. At AXIS, we are evaluating its capabilities, from the starting point when submissions come into our organization to help qualify those submissions more readily, to the more complicated risk assessment where we can improve not only the individual insights that we have—or the current models that exist—but also supplement the data and analytic insights that come out of those models.

We’re very excited about the longer-range benefit of using AI to supplement our operating model and intend to embrace its capabilities.