Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

AXIS Capital to remain committed to ILS activities


Despite the fact the global specialty insurance and reinsurance underwriter announced a withdrawal from underwriting property reinsurance business, AXIS Capital intends to continue to build out its insurance-linked securities (ILS) operations, under the AXIS ILS brand.

AXIS Capital logoEarlier this week it was announced that AXIS Capital’s reinsurance underwriting division AXIS Re will exit the property reinsurance business, as the company continues to manage and reduce its overall catastrophe volatility.

Artemis understands that, for now, this has no bearing on the insurance-linked securities (ILS) business that operates under the AXIS ILS brand, with activities continuing and even set to expand there.

The AXIS ILS unit will now report into the new CEO of AXIS Re, Ann Haugh, who as we reported will take over from the outgoing Steve Arora.

Chris Caponigro, who joined the company almost a year ago as Global Head of AXIS ILS, will report into Haugh in future, keeping the same reporting line he had under Arora.

AXIS rebranded its rebranded third-party capital activities as AXIS ILS at the same time, as it sought to build on its opportunities to match risks with the right forms of capital, something it had been achieving through its relationships with so-called strategic capital partners for a number of years.

AXIS has been utilising its integrated model to package risk and execute transactions with investors, using a range of structures and vehicles to help third-party capital access some of the returns of its underwriting business.

That looks set to continue and despite the pull-back from property reinsurance, we understand AXIS has ambitions to grow its ILS activities in the future.

AXIS continues to be active in ILS and we are told the philosophy there will see it increasingly broaden its focus, to encompass new structures and types of risk, as it looks to opportunities to harness investor appetite for insurance and reinsurance linked returns.

With ILS steadily expanding its scope beyond just pure property catastrophe business, AXIS sees opportunities to use its platform to help investors access returns from longer-tailed insurance and reinsurance classes, as well as more capital-intensive lines of insurance such as property and cyber.

Overall, we’re told the AXIS team remains committed to the ILS business and hopes to continue growing it, seeing value in the contribution that partnerships with third-party capital investors bring to its business.

AXIS has made a further demonstration of its commitment to the ILS market this week, in the launch of a new Northshore Re II Ltd. catastrophe bond issuance to investors.

This shows that, even though it may stop writing inwards property reinsurance business, AXIS still accumulates natural catastrophe exposure and partnering with ILS investors through a range of structures, to both protect itself and share in the economics of this type of risk with third-party investors, remains appealing to the company.

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