AXA to benefit more than it will lose from softer reinsurance rates, says Group CFO

Alban de Mailly Nesle, Group Chief Financial Officer (CFO) of global insurer AXA, said this morning that as both a buyer and seller of reinsurance, overall, the firm stands to benefit more than it will lose from softer reinsurance pricing.

This morning, , which included premium and revenue growth at AXA XL, its property and casualty (P&C) and specialty risk division, with 11% premium growth at AXA XL Reinsurance to €2 billion.

Following the announcement, the French re/insurer held media and analyst calls, during which the reinsurance business was discussed, as well as the impacts of rate softening in the market on AXA at the Group level.

Like many global players, AXA both buys and sells reinsurance protection, and given that rates have softened somewhat from the highs of 2023 when the so-called reset occurred, notably in the property and property cat areas, executives were questioned on whether this a positive or negative for AXA.

“To put things in perspective, you see that on an annual basis, AXA XL Re’s earnings are around €500 million, but we cede more than €2.5 billion of margins through ceded reinsurance. Those two are not directly comparable, but that gives a view on the importance of both,” said the CFO.

Adding that, “overall, we will benefit more than we would lose with softer rates.”

So far, Q2 and H1 2025 earnings calls have often featured questions around reinsurance market softening. , while property rates have softened from the highs of previous years, they are still very attractive and the market remains hard, so it’s important to distinguish between a softening and a soft market.

During the media call, Frédéric de Courtois, Deputy Chief Executive Officer, in charge of Finance, Operations, Strategy, Risk, and Underwriting of AXA Group, noted that over the past two to three years, the AXA XL Re business has been restructured, underlining that this has worked.

“Of course, the market is sound, but within that market, AXA XL Re has performances which are quite satisfying. We’ve reduced our exposures. We’ve implemented underwriting which is more disciplined, so we’re very happy with the performance,” said Courtois.

“Beyond this, we’re not specifically doing any business when it comes with the ILS funds or the cat bonds. That’s not our positioning. Having said that, sometimes AXA XL Re disposes business in this form to ILS funds, which generally are financed by private equity funds or to cat bonds. This is what we call AXA XL Re’s retrocessions. On certain businesses, it could be given to these funds which essentially are involved in nat cats.

“Also in the past, and that will be the case probably in the future for our insurance business, we cede cat bonds to ILS funds and for us, we see these opportunities in terms of retrocessions, but we are not active when it comes to underwritings,” he added.