AXA cedes the bulk of its reinsurance premium growth to ILS capital: CFO

AXA Group reported that gross written premiums grew by 12% for its AXA XL Reinsurance division during the first-quarter of the year, but the firm’s CFO Alban de Mailly Nesle explained that the majority of that was ceded to insurance-linked securities (ILS) strategies.

Within the AXA XL Reinsurance division gross premiums underwritten increased by 12% to Euro 1.4 billion in the first-quarter of 2025.

One reason for the growth in reinsurance premiums was clearly a still-attractive market environment for AXA, as the company reported reinsurance renewal price increases of a positive +1.2%.

But the company is not actively seeking to grow reinsurance premiums for its own book, rather the Group CFO said during an analyst call that the majority of the growth is to furnish premiums that are ceded to insurance-linked securities (ILS) strategies, or sidecars.

Commenting on the reinsurance premium growth, Alban de Mailly Nesle, Group CFO, AXA said, “On reinsurance, revenues were up 12%. That’s driven largely by business that we write but cede to insurance linked securities.

“But pricing continues to be favorable and that comes, as you know, on top of strong price increases last year.”

Explaining the rationale for the lower net growth for its own book, the CFO said, “If we can grow our business, in order to transfer part of the risks to alternative capital and insurance securities or sidecars that’s something that we want to develop, because that’s the way for us to accompany our customers and not take more risks, and generate fees on that business.”

Adding, “So that’s what we want to deploy, but clearly on a net basis, reinsurance is not something that we want to grow.”

Later in the call, de Mailly Nesle provided some idea of how much of the GWP was actually ceded to ILS structures.

“On AXA XL Re, if you exclude the business ceded to ILS, growth is closer to 1% or 2%,” he explained.

Suggesting that between 10 and 11 points of the GWP growth was ceded to ILS strategies or sidecars under the management of AXA Group’s alternative reinsurance capital and insurance-linked securities (ILS) management division, AXA XL ILS Capital Management, which sits within the commercial arm AXA XL.

“So the bulk of the additional business, to put it that way, was ceded to ILS,” de Mailly Nesle confirmed.