Reinsurance
AXIS Re generated an underwriting profit of $41.3 million for the year, underscoring the increased resilience and durability of the portfolio.
In a year where the industry was yet again impacted by significant levels of catastrophe events, AXIS Re’s focus on quality portfolio construction, disciplined underwriting, and careful risk selection was evident in our year-end results.
Further, our commitment to continuous portfolio management resulted in strong underlying performance – demonstrated by our current year ex-cat combined ratio of 86.3%, an improvement of 1.7 points from the prior year and the best since 2012.
Segment Performance
Gross premiums written in 2021 were $2.8 billion, an increase of $14 million, primarily attributable to growth in Liability, Professional Lines, and Accident and Health. The premium growth was partially offset by decreases in Catastrophe, Motor, Property, Engineering, and Credit and Surety lines due to ongoing portfolio optimization efforts. For the full year 2021, we achieved an average rate increase of 11% across the portfolio.
In the past year, AXIS Re continued efforts to reduce catastrophe exposures and reduce earnings volatility – an intentional and deliberate action. In addition, our portfolio optimization efforts resulted in a 26% reduction in our 250 year of our cat PML (AEP gross basis). Pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, were $268 million, compared to $330 million in 2020 which included $156 million attributable to the COVID-19 pandemic. The current accident year loss ratio excluding catastrophe and weather-related losses improved by 0.7 points, to 59.9% in 2021 versus 2020.
Our results are an indication that the Reinsurance sector, while still running overall behind primary pricing, is headed in the right direction. While this progress is encouraging, momentum must continue to adequately compensate reinsurers for risk and volatility.
Investing in Partnerships, Technology and Talent
Partnerships are the cornerstone of our business and AXIS Re has continued to focus on maintaining high levels of both client satisfaction and employee engagement. Our favorable industry client satisfaction scores remained consistent, even as we managed the portfolio, a direct reflection of the quality of our franchise, people, relationships, and interaction with clients.
In 2021, we had over 11,000 interactions with clients and brokers, demonstrating strong client visibility. Another important contributor to maintaining client satisfaction is our claims response time, which was 5.84 days at year-end 2021. At the same time, our engagement score from our employee survey increased by two points alongside improved staff retention, demonstrating a positive business culture.
We also continued to invest in technology to enhance our operations and capabilities. This year, we launched several initiatives to drive efficiency and collaboration across our teams, including real-time portfolio management, cloud-based underwriting workflow, enhanced reporting, and automation in technical accounting connecting to key brokers.
To position AXIS Re for the future, we made key talent appointments such as the addition of Katie Partington Howarth as Chief Underwriting Officer. We evolved our organization and sharpened our focus by creating a new Global Property Division and combining our EMEA, LatAm and Asia Pacific units into a unified International Division. We designated strong leadership in each of these areas, as well as in our Specialties and North America Divisions. These adjustments will enable us to be even more agile and responsive in the face of changing market conditions, while furthering our commitment to delivering strong expertise and an engaging client experience.
Looking ahead, AXIS Re will continue to focus on intelligent risk taking, smart capital allocation, and producing strong returns for our shareholders.
Combined Ratio