Insurance
By many measures, 2021 was among the strongest years in the history of our Insurance business.
We produced $4.9 billion of gross premium in 2021, making up 63% of our consolidated writings. New premium production was $1.5 billion, benefiting from a sharp focus on attractive lines of business. The segment delivered an underwriting income of $224 million, despite an environment marked by many severe weather events and the resulting catastrophe losses. Reflecting our disciplined approach to underwriting, the current year ex-cat combined ratio improved 5.8 points from a year ago to 85.9%.
Our progress can be attributed to a multi-year effort to strengthen underwriting, optimize the portfolio, and control expenses. These initiatives positioned the Insurance business well for an overall improvement in market conditions. We’re confident that the business is on pace to establish its place among the top carriers in the specialty insurance sector.
Segment Performance
We have seen positive rate changes across nearly all lines for several quarters, resulting in renewal rate increases and a hardening of new business pricing, with a full-year 2021 rate increase of 14% across the Insurance portfolio.
While our results benefited from a favorable rate environment, they also reflect ongoing efforts to shift away from classes that were not performing in line with our objectives. As we continued to migrate the Insurance portfolio toward the most attractive lines of business, overall gross written premium reached $4.9 billion – an increase of $845 million, or 21%, across the portfolio for 2021 from 2020.
Attractive markets, including U.S. E&S, Accident and Health, Professional Lines, Renewable Energy, select casualty lines and others, represented 65% of the portfolio as of year-end 2021.
Further, as we continued our efforts to reduce volatility due to catastrophe events, our pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums were $175 million, compared with $443 million in 2020 which included $204 million attributable to the COVID-19 pandemic.
Investing in Growth and Performance
With an eye toward the future, we have pursued initiatives in technology, talent, products and partnerships. We are increasingly using technology to automate data-intensive functions, allowing our teams to focus on adding value through their specialized expertise.
A key move in the talent area was the appointment of Brian Kemp, formerly our Chief Pricing Actuary, to our Chief Data Officer. Brian is leading our efforts to compile and manage multiple data streams in a way that is accessible, actionable and effective across the Insurance organization.
We also have continued to incubate new product areas, including continued expansion of our digital-based solutions for small business insurance and our entry into pet insurance in the U.S. and Canada through a partnership with PetPlan.
In addition, we also partnered with Insurtechs through AXIS Digital Ventures such as Envelop Risk. Envelop Risk, with its deep expertise in cyber, brings a novel artificial intelligence and technology-based approach to portfolio management, supporting our strategy of applying technology and data to give our underwriters the clearest view of risk.
The strong performance of our Insurance business in 2021 reflected a sharp focus on portfolio optimization and underwriting discipline – and it was also about execution. From underwriting, to distribution relationships, to claims, AXIS colleagues worked collaboratively to execute and deliver on our goals and objectives. In 2022, we will be focused on continuing the active growth of this business by investing in capabilities and services that will increase the value that we deliver to our customers and the greater specialty sector, enhancing our customer experience, and continuing to settle claims in a professional and transparent manner.
Written
Underwriting Income