The Interconnection of Risks

What was the catalyst for this new role?

I wouldn’t say there was a catalyst that sparked the change. It was really more of an evolution. And as risks continue to get more complicated, intertwined, clients are realizing they need more than just an insurance policy to manage their risk. So what we continued to hear from clients was they could use more help. A more holistic approach. Because, in the global economy that we’re in, we’re more interconnected than ever. So we really need to be able to look at risks holistically. And I think if you consider a couple of things, for instance, around operational risk and cyber risk, as companies rely more on digital technologies for their operations, the risk of cyberattack data breaches, lead to financial losses and damages, and really impact a company’s reputation.

So operational risk and cyber risk are really intertwined, as a cyber incident can really directly impact our insured’s day to day operations. They’re thinking about the fact that these risks come not only from where they’re based, but anywhere around the world. And our clients are also really focused on both climate change and supply chain risks. As climate change and natural disasters really disrupt supply chains and transportation production facilities, we’ve seen continued incidents of how extreme weather events can lead to both delays in production or distribution, which can impact the company’s ability to meet their own customer’s demands. 

As we started to think about how our client’s risk is interconnected, we really needed to build a way to understand our client’s businesses to get what they’re contending with so that we can be responsive to their needs and continuously work on improving their experience.

You have the C-suite dealing with these issues of supply chain, sustainability, and governance. So as all of that risk conversation moves into the C-suite, how does that change the way that you're interacting with your clients?

I think that really gets back to how the risks are getting more complicated and intertwined, and that’s really leading our clients to look to us to support them beyond just an insurance policy. And in order to do that, we really need to delve deeper into our clients operations and their business strategies to see how we can help them. I think a good example is around our energy transition focus and what we’re looking to do there is to help our clients transition to alternative energy sources. And that could be looking into the right financing to build, all the way through to their decommissioning processes. So this certainly involves energy companies, but it also involves our other clients who are looking to build more energy efficient facilities. Its all about understanding what their long term goals are.

Our key strategy is to bring together the full capabilities of AXA Group to meet their needs on that journey. Because, I think a lot of our clients have aspirations of how they’re going to get from where they are to where they need to be. So there are a number of ways that we can tap into expertise across AXA. This includes, looking at builders risk, to structured risk solutions, to our property team. So it really gives us a breadth of experience to help be very focused on what our clients are trying to accomplish.

Are you finding that policyholders are improving their cyber hygiene? Because five years ago, there wasn't a lot of risk management or mitigation that was going on in that area.

There’s significant improvement. And we’ve actually recently set up a global center of excellence so that we can make sure that we’re driving consistency in terms of that hygiene for AXA clients, not just within AXA XL, but the entire AXA group, because we do recognize that cyber in particular is a global exposure. So it’s important to really have that, you know, baseline around hygiene, regardless of where the insured is based.

Other than cyber, any other particular lines where you are focused on seeing interesting trends happening?

We definitely see opportunities to grow our casualty business. So even though there’s been challenges around social inflation, we have, in our new structure, more closely aligned our primary team and our excess underwriting teams to really be able to address our clients casualty needs on a more comprehensive base. We also continue to see significant opportunities in construction. You can’t travel anywhere without seeing significant construction activity, really. The industry is booming right now. According to the AGC, who’s the Associated General Contractors Association, spending is up year over year, about 10%, and we’re definitely seeing significant project opportunity. And our team has really built a solid reputation being able to address our construction clients risk across the board.

Our team is aligned as a vertical, so regardless of the product that they need, our team can really come to the table. We also bring risk engineering expertise to proactively address issues like labor shortage or subcontractor default trends. And we’re always looking to help find ways to address loss trends or to help our insureds boost their loss prevention efforts. So there’s lots of different opportunities for us. Property is an area of continued growth and also an area just to keep an eye on. As you mentioned, we’re in that back half of the year, which can always be a bit exciting for the property market.

With the Atlantic hurricane season already underway and lots of predictions for a pretty extreme season, do you all have any concerns there or are you feeling fairly good?

I think given the intensity of Beryl, everybody has at least a little concern about what the rest of this season will likely bring. It was the earliest forming cat five hurricane on record. Big storm activity driven by warm waters in the Gulf, I think just puts everybody on alert for what the rest of the season will bring. But I think with every hurricane season, we work very closely to be aligned with our clients to make sure they’re prepared if they’re in the path of a hurricane and if a hurricane strikes. Our teams are proactive in terms of engaging with our clients to make sure that their needs are met when that activity does take place.

And we’re also in terms of working closely with clients, really trying to help them avoid and plan for natural catastrophes and really try to harden their properties through our experienced risk engineering teams that can help our insurance enhance their structures and make them more flood resistant.

Are you seeing clients coming to you who may be facing not necessarily a hurricane coming towards them, but something that maybe coming towards a supplier of theirs? Or Is that something too far removed?

We use a technology for our marine clients that helps us track their shipments and the boats. This includes all of the marine activity that’s taking place, and helps our insureds understand where there could be materials that are at risk. For instance, in the Red Sea, it’s really been helping our marine clients to understand alternatives. As folks have had to redirect cargo around Africa, it’s really been a value to help our marine clients really see where any of their cargo and ships are at any given moment. So I think there’s definitely a emphasis at AXA XL in terms of providing technology and services to our clients to really understand and help to manage that supply risk exposure.

A year ago AXA XL launched a middle market service line. Could you give us an update on how that is progressing?

We did launch our middle market operations just over a year ago and we’ve seen a very positive response from the market and we’ve just kicked off a mid-size construction underwriting team. So this is really a natural extension of our positioning in the large commercial construction market. And, we’ve started with a limited distribution to really make sure that we can grow our middle market team appropriately and provide the service to our brokers that they’ve come to expect from us in the large commercial business. As we look to grow significantly in our middle market space.

Additionally, technology is definitely an important part of how we service our brokers. Most of the time for a middle market opportunity, they’ll be looking for us to address the five lines of coverage. So, being able to come to the table with a solution across multi lines in a quick and efficient fashion is something that is a significant area of focus for us.

What does a successful collaboration with brokers look like for AXA XL, in terms of both work and serving your clients?

In the market that we operate in, it’s really essential to establish a strong working relationship built on trust and transparency to ensure successful collaboration. And, we really need to have relationships that allow us to collaborate with the brokers to understand our client’s needs. We really are focused on open lines of communication and regular meetings to exchange information.

We also really like to involve brokers in the development of new products and services, so that we can ensure that we’re aligned with the market dynamics and the needs of the clients. Because, many times, while we’re working very closely with clients, our brokers have a direct, day to day interaction with them in terms of really understanding what their key goals and needs are.