In 2018, our Reinsurance business began an exciting new phase as we welcomed CEO Steve Arora in January and launched a series of initiatives designed to grow relevance, gain market leadership and become a Top 10 reinsurer.

We believe that this will increase our access to risk, and in turn allow us to deliver more value to our clients and our communities.

In particular, AXIS Re has focused intensely on sharpening client-centricity, which we believe is the key to building strong portfolios, delivering exceptional service, and driving profitable growth. In 2018 we made great strides on this journey. This included introducing a new client engagement model based on a more consultative approach to strengthening our strategic value to clients as they navigate a constantly evolving marketplace. Likewise, we adopted a new organizational model to align our resources and energies to better serve clients and our distribution partners.

Our Drivers

Building on our long-standing track record as a responsive and agile reinsurer, combined with the need to prioritize client-centricity and adapt as the industry evolves, AXIS Re will focus on five key drivers in the future:

  • Performance culture that stands for accountability, discipline and an obsession with success;
  • Human culture that emphasizes employee engagement, emotional intelligence, and a real sense of purpose;
  • A more modern and sophisticated approach to underwriting and portfolio management;
  • Client engagement model focused on consultative sales and superior claims management; and
  • Expansion of our capabilities across products and markets to complement our core offering.

These key drivers will help unlock the potential of the business, in combination with a new organizational model designed to deliver on our long-term promise. Customer-centricity is a distinguishing strength of AXIS Re and is critical to our future, making us more responsive and agile to address the needs of our clients in a changing market, while providing greater value. The high-performance culture AXIS Re is building will underpin everything we do. Our key values are based on discipline, accountability, and an obsession with success; matched equally with human elements such as empathy, emotional intelligence, and a deep sense of purpose. Culture has a direct relationship with business results and we believe a motivated and engaged staff will translate into better solutions and higher client satisfaction.

Modern and Sophisticated Approach to Underwriting and Portfolio Management
One way in which AXIS Re started to create a more modern and sophisticated approach to underwriting and portfolio management in 2018 is through the creation of the Reinsurance Products division. This division consolidated AXIS Re technical functions to place a greater emphasis on portfolio management and risk selection. In addition, we created the AXIS Re Product Center. As a subset of the Reinsurance Products division, the Product Center is implementing a technology-based approach to underwriting and portfolio management, and has built a proprietary end-to-end underwriting work flow tool. A key feature of the new AXIS Re structure is that the actuarial and catastrophe modelling teams remain embedded within the local teams, ensuring close collaboration and team orientation when solving client needs.

We are also very committed to building a stronger portfolio, matching our capital to the right risks and ultimately optimizing our portfolio for the greatest financial return. This approach is not mutually exclusive to our client-centric approach as both clients and reinsurers understand that underwriting discipline and portfolio management are critical factors to success.

Refreshed Client Engagement Model
Customer-centricity also means that we are not simply selling reinsurance products, but rather understanding the needs of our clients and brokers, and responding with meaningful solutions. That was the inspiration to emphasize a more consultative approach to client engagement in 2018, in an effort to make AXIS Re a more strategic and high-valued partner.

For example, in mid-2018 we announced the formation of AXIS Re Strategic Partners, a dedicated team created to serve clients and brokers on a global basis. This new team is designed to engage with clients thoughtfully and deliberately, to listen to and understand their needs, and to respond with relevant solutions. We have created seven Strategic Account Executive roles to globally serve 23 Strategic Partners — both clients and brokers.

By enhancing our client engagement model while also taking a relationship-driven approach, we are demonstrating our commitment to service. We are also identifying opportunities to develop new products that meet the needs of our clients.

Expansion of Our Capabilities Across Products and Markets
To ensure we deliver maximum value to our clients, we have taken a series of actions to strengthen our capabilities across products and markets. For example, we have:

  • Broadened our capabilities for Structured Reinsurance to enable customization;
  • Created a team to service the highly expert-driven Specialty Re businesses;
  • Expanded the capabilities of our Lloyd’s platform; and
  • Committed to expanding our presence in Asia.

Performance Highlights

In 2018, gross premiums written increased by $371 million, or 14%, and net premiums written increased by $83 million, or 4%. Gross premium written and net premiums written were positively impacted by the acquisition of Novae by $100 million and $72 million, respectively. Adjusting for the acquisition of Novae, the increase in net written premiums was driven by new business and rate increases across Credit & Surety, Motor, A&H, and Catastrophe lines, partially offset by the purchase of additional retrocession protections and increased risk-sharing with our third-party capital partners.

Reinsurance reported underwriting income of $46 million, compared to an underwriting loss in 2017 and ex-PGAAP underwriting income of $42 million, compared to an ex-PGAAP underwriting loss in 2017. Following three strong quarters, reinsurance results were negatively impacted by high catastrophe and attritional property losses in the fourth quarter. In 2018, Reinsurance improved its accident year loss ratio excluding catastrophe and weather-related losses through disciplined underwriting actions, including rate increases.

The past year was distinguished by solid strategic, operational and financial progress for AXIS Re. We are excited about our plans for the future, as we focus on high client satisfaction, high employee engagement and bottom-line growth. We will accomplish these goals while maintaining our character as an expert-driven and agile reinsurer. Our vision for leadership in the reinsurance market is not about what our customers can do for us; it is about the partnership and solutions we seek to offer so that our customers will win in their marketplaces.