AXA XL and Zurich report accelerated market hardening in Q3

AXA XL and Zurich have reported rising rate increases for corporate buyers during the first nine months of this year, with the trend accelerating in the third quarter. AXA XL has seen total revenues increase 11% to €14.2bn in the first nine months of this year. P&C insurance revenues are up 18% to €6.9bn, specialty revenues are up 8% to €3.7bn and reinsurance revenues rose by 2% to €3.3bn. The unit achieved average insurance price increases at renewal of 6.9% for the first nine months and 2.8% in reinsurance. The firm said market hardening is accelerating, with third-quarter renewal pricing up 11%. AXA XL added that a series of “severe” third- and early fourth-quarter nat cat events have resulted in above average claims for the period. Combined with ongoing wildfires and other smaller nat cat events, it estimates claims of about €400m in excess of normalised losses during the second half of this year. It expects losses from Hurricane Dorian of about €100m before tax and net of reinsurance. Typhoon Faxai losses are estimated at €120m and Hagibis losses €200m. Gérald Harlin, deputy CEO and group CFO of AXA, said: “AXA XL achieved significant revenue increases, notably in P&C insurance and specialty. The favourable pricing environment in insurance continues to improve, with the third-quarter renewals experiencing significant rate increases.” AXA Group saw gross revenues increase 5% for the first nine months to €79.7bn, with P&C commercial lines revenue up 7% to €24.9bn. Zurich reported P&C gross written premiums (GWP) up 7% to $26.44bn on a like-for-like basis – which adjusts for currency movements, acquisitions and disposals –for the first nine months of this year. It said rates are up across the period and accelerating in the third quarter. Zurich saw P&C growth across all regions, with GWP up 6% in Europe, the Middle East and Africa, 4% in North America, 14% in Asia-Pacific and 21% in Latin America. When it comes to pricing, P&C rates were up 3% overall for the nine-month period. North America saw the biggest rise of 6% and Zurich said increases were in excess of 7% in Q3, with improved terms and conditions. Asia Pacific saw rates rise 4% for the nine-month period, with increases of 2% in Europe, the Middle East and Africa. They rose 1% in Latin America. “We are pleased with the development of the group year to date, with continued progress against both our strategic and financial plans, including additional distribution agreements. We expect to exceed all of the targets that we set in 2016,” said group chief financial officer George Quinn. “In P&C, pricing continues to increase, supporting growth and continued improvement in the portfolio, while in the life business we are well positioned to face the challenge of low interest rates,” he added. Zurich also noted that after “very moderate” nat cat and weather claims in the first half of the year, the third quarter was more in line with historical levels. Last week, Marsh & McLennan Companies (MMC) CEO Dan Glaser revealed during the broker’s latest results call that Marsh’s Global Insurance Market Index recorded its largest ever commercial insurance price rise of nearly 8% in the third quarter since it began tracking data in 2012. France’s risk management association AMRAE, meanwhile, says the commercial insurance market has turned and advised French companies to budget for between a 5% and 20% rise in insurance spend, while being be prepared to keep a higher volume of risks on their balance sheets.

AXA XL and Zurich report accelerated market hardening in Q3

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