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Axis CEO: Reinsurance pricing unsustainable

Albert Benchimol, CEO of Axis

Reinsurance pricing is not sustainable, Axis president and CEO Albert Benchimol warned yesterday.

Mr Benchimol said, however, that the subject was not being discussed as much as he would like at Monte Carlo industry conference Rendez-Vous.

He added: “If I had one point to make, I wish there was more discussion about how the current pricing environment is really not sustainable and we really need, as an industry, both the primary and reinsurance industry, to look to ways to improve the profitability of our industry.

“I think people are being very polite — they are not addressing the subject.”

Mr Benchimol was speaking to AM Best TV at the Monte Carlo conference.

He said that the industry, without reserve releases, was “probably a mid-single digit return on equity proposition”.

Mr Benchimol added: “That is not acceptable. We need to do better and I think that, at the end of the day, it within ourselves to be able to make sure that we focus on the right risks and charge the appropriate pricing for the risk.

“I wish we were talking more about that.”

Mr Benchimol said major changes had affected the industry since last year’s conference.

He added: “If I were to focus on three things, I would say number one is increasing use and interest in data analysis by industry.”

Mr Benchimol said investment in financial technology — fintech — was $800 million two years ago, but $2.8 billion last year and that it would continue to affect all parts of the industry, particularly distribution.

And he said: “Third, I would say efforts by many parts of the industry at disintermediation, trying to short-circuit previous distribution channels to try and get closer to the business.”

Mr Benchimol added that Axis had been an early investor in data and analytics in the specialty commercial sector.

He said: “Certainly, data and analytics have been very large, very big, in personal lines and life insurance — less so in specialty commercial, but that is really picking up steam.”

Axis, he added, had upped investment in the area over the last three years and worked on “improving the way we look at our books of business”.

On fintech, Mr Benchimol said: “It’s still very early. There will be opportunities to partner with different start-ups in that area to make sure we’re abreast of developments in that area.”