Despite the challenges brought by COVID-19 and an active cat season, AXIS Insurance showed progress in 2020, demonstrated by the improvement in our underlying performance.

This was highlighted by a 2-point decrease in our accident year loss ratio ex-catastrophe and weather as compared to the year prior, evidence that our portfolio optimization efforts are paying off. At the same time, we increased our gross premiums written, reporting growth compared to prior year for five quarters in a row. This coincided with a firming market and tightening terms and conditions across most of our lines of business.

Throughout the year, we remained focused on our priorities: driving growth in our invest and grow lines of business; working to expand our margins; maintaining cost discipline; and investing in building an efficient, digitally-enabled business to better support our clients and partners in distribution.

Our team managed a seamless shift to a work-from-home environment, while ensuring that our service and responsiveness are sustained at high levels for our brokers and clients. As we look to 2021, we have momentum.

Financial Performance

In addition to the 2-point decrease in our current accident year loss ratio ex-cat and weather, gross premiums written increased by $342 million or 9.3% for 2020, primarily due to strong growth in professional lines, liability, property and accident and health, largely attributable to new business complemented by favorable rate changes. The increase was partially offset by decreases in credit and political risk due to the economic climate. Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, were $443 million for 2020, largely reflecting COVID-19 losses and significant hurricane and convective storm activity.

Increase in Gross Premiums Written
In new business

Growing in Core Categories

In 2020, we accelerated our strategy of driving leadership in our chosen markets, concentrating our growth in attractive markets where we are relevant players or see a path to leadership. Following several years of portfolio remediation, approximately 80% of our portfolio represents business lines that we would like to grow or maintain. This set the stage for solid growth in 2020, reflecting the combination of a stronger portfolio and new business complemented by favorable market conditions; and we like our continuing prospects in lines such as U.S. casualty, open market property, professional liability and renewable energy.

Likewise, we reached a high water mark in new business written ($1.2 billion). This speaks to our relationships with our distribution partners, and the efforts of our underwriters to process and write that business.

Responding to market conditions, we also reassessed our cyber book. While we know cyber insurance will be a key product for our industry given the universality of information technology and digital business processes, the evolving ransomware and biometric exposure trends are such that we initiated corrective action on our cyber book to ensure that we protect both our profitability and leadership position in this important market.

In 2020, we also pursued new distribution relationships in areas of strategic opportunity. For example, we partnered with Simply Business, an online broker of small business insurance, and with AllDigital to develop and launch a new insurance platform designed to address the service void in the U.S. small private company management liability market.

Our capacity to support a strong new business pipeline reflects our investments in recent years to build our infrastructure. We have invested in the technology that underpins our core underwriting systems, in actuarial resources to provide data to our underwriters and in product development.

In 2021, the Insurance segment will concentrate on driving profitable growth across a more sharply focused portfolio, targeting our invest and grow businesses. We will continue to drive margin expansion, while reducing the expense ratio. And, we will invest in building an efficient, digitally-enabled business that supports innovation, client service and performance — hallmarks of the AXIS brand.