Smart growth in transformative times

Accompanying clients as they navigate a rapidly changing and complex risk landscape is at the heart of AXA XL’s smart growth strategy, writes Etienne Champion and Corinne Southarewsky.

We are witnessing a once-in-a-generation transformation of risk. In an already-volatile and difficult trading environment, businesses are faced with navigating their way through hugely complex issues like climate change, digitalisation, and the emergence of new technologies like artificial intelligence.

These are not short-term challenges, and the ability of businesses to manage the risks and opportunities of transformation will be key to their long-term success. This is also true for insurers, who must work with customers to understand changes in the risk environment, mitigate the risks and develop solutions in order to remain relevant and meet the needs of stakeholders.

As a key partner for business and a risk taker, insurers need to be ready to protect customers on their transformative journey and help them deal with today’s complex and uncertain operating environment. We stand alongside our clients, accompanying them through their current and future challenges, building insurance solutions together using our risk expertise across a broad range of risks, industries and geographies.

Shared problem, collaborative solution

Negotiating challenges like the green transition will require a different approach, with increased emphasis on sharing data and insights, risk engineering and loss prevention services. We continue to expand our use of advanced data analytics and build out our risk advisory offering through AXA Climate and AXA Risk Consulting, where 400 risk engineers are already helping companies understand their exposures and build resilience.

Insurers have long supported businesses and society through periods of innovation, helping to facilitate the uptake of new technology, such as the first commercial passenger jets, high speed trains or offshore wind farms. Today, however, the pace of change and complexity of risk is greater, and society has yet to fully establish the regulations, standards and risk management practices and controls to manage emerging risks like green hydrogen or electric vehicles.

Developing the required risk management practices and insurance solutions for emerging technologies will require long-term partnerships and deeper relationships, sharing data and insights, and co-creating new risk mitigation techniques. The more we understand current and complex emerging risks, the better we will be able to price risk and deploy our capital, as well as offer products and services that will improve resilience of businesses through risk prevention, mitigation and adaptation services.

Sustainable growth

So how can we achieve growth and support our clients in a volatile operating environment? AXA XL’s Smart Growth strategy in Europe and APAC is aligned with the needs of clients as they plot a course through this period of change, whether that be insurance cover for new risks, supporting increased risk retention, or demand for risk mitigation services or training.

Over the last three years, we have worked at rebalancing our portfolio to place us in a strong position to overcome current adverse trends in a less disruptive way than in the past. AXA XL has appetite to grow in most commercial property/casualty and specialty lines in APAC and Europe, including captives, global programmes, niche specialty risks and new risks, like cyber and those from the green transition. In Asia, we are building on our products, solutions and expertise to develop our footprint in new geographies.

AXA XL is investing in a number of areas that will enable us to accompany our customers on their journey, expanding our knowledge, expertise and data analytics to understand their risks and provide solutions, building deeper long-term relationships, continuing to support customers as they retain more risk, and expanding our risk prevention and mitigation services. These investments will also enable us to operate through more efficient platforms and deliver an enhanced client experience, which will also benefit our employees and will support our expansion in mid-market and small and medium-sized enterprises (SMEs).

Upskilling for the future

Skills and expertise will be key to understanding risk and supporting clients. In a world of increasing complexity and emerging risks, we need the right people, with the right skills, at the right moment. As we seek to build our expertise in new technologies and industries, we are actively recruiting in all functions and upskilling in areas like risk engineering, analytics and data science, as well as natural hazards and cyber. Increasingly, we think in terms of skills, not jobs or roles.

Training is also key to tackling new areas of risk. For example, AXA Climate School helps employees understand the impact of climate change and biodiversity loss, and how they can make a difference. By the end of 2023, all AXA Group employees will have completed the training, which has also been made available to clients and stakeholders. Similar plans for a Cyber School are now also underway.

Sharing risk

Increasing complexity and volatility of risk will place growing emphasis on risk sharing. As risk management maturity has increased, large companies have felt more comfortable retaining greater risk, and many have sought to consolidate and centralise their risk management and insurance through captives and global programmes. This trend will be reinforced by the evolving risk landscape, which will require companies to retain more of their own risk as they work with insurers to understand emerging risks and technologies, developing risk mitigation and insurance solutions.

We are already seeing an uptick in captive use in response to changing market conditions, and as companies increasingly use their captive insurers as a tool for risk management. Many captives now fund high levels of deductibles and are being used to plug gaps in cover or programmes as the insurance market has adjusted its risk appetite. With over 150 captive cessions, AXA XL is well positioned to help clients leverage their captives, providing access to our global network, claims expertise and risk engineering services.

Global expertise, local delivery

With over 30 products, and a footprint that reaches more than 200 territories, AXA XL has a diverse global platform, ready to meet the changing needs of businesses, whatever their size and wherever they are located. There is also appetite to grow in specialty lines of increasing importance to clients, such as cyber and political risks, as well as traditional property casualty lines and motor.

Our goal is to address the full spectrum of property/casualty insurance from SMEs to multinational corporations. We have appetite to accompany large companies in their international development through global programmes and support for captives. We are also accelerating growth in the mid-market, working with brokers to support mid-sized firms as they develop their businesses and become more international.

AXA XL is a unified global company, empowering business to be delivered locally. By investing in local client servicing and our global digital infrastructure, we are increasing customers’ access to AXA XL’s global expertise, products and solutions. Geographical and product diversity enables us to strengthen our relationship with customers and build on the challenges and experiences of customers around the world, sharing the learnings and expertise between industries and regions.

Risk partners

In a world that is increasingly complex and interconnected, we are working all together to understand the risks and develop new risk management practices and standards, as well as insurance products and services. We want to stand by our clients for the long term and ensure they can find with us the solutions they need, when they need them, and at relevant terms and conditions. Our teams – risk engineers, underwriters, distribution, middle-office and claims colleagues – will all remain joined up to deliver the best services to our clients from the very first contact and all along their journey with us.