The impact on jobs at XL Group is expected to be limited after it is acquired by French multinational insurance company Axa in a $15.3 billion deal.

Although no figures have been mentioned, Mike McGavick, chief executive officer of XL Group, believes staff at both companies will be affected “less than ordinarily [expected]in such advanced integration” because there is little overlap in operations.

Axa is buying Bermudian-based XL Group in a deal that will be completed in the second half of the year, subject to shareholders’ and regulatory approval.

The XL Catlin brand is set to continue under the Axa umbrella, however it is intended that XL Group will be delisted from the New York Stock Exchange.

Axa is transitioning from being predominantly focused on life insurance and savings to becoming the number one global property and casualty commercial lines insurer based on gross written premiums. The integration of XL into Axa will achieve that shift.

Insurance accounts for two-thirds of XL’s operations, with the remainder reinsurance. The transaction will give Axa access to capital markets through the reinsurance sector, while XL will have the opportunity to take its specialty products to a greater client base through Axa’s extensive market reach.

Gérald Harlin, deputy CEO and group chief financial officer of Axa, at a press conference in Paris yesterday, responded to a question about cost savings and the impact on jobs. Referencing the intention to delist the company, he said: “XL is a listed company, which means a lot of [that] structure and infrastructure will be no more needed.”

Mr McGavick said XL has a staff of 7,400 globally, with more than 30 offices and a presence in 50 countries. It writes $15 billion in premiums each year, and has grown rapidly since the $4.1 billion merger with Catlin in 2015.

He said: “In terms of key business lines, we are a premier specialty platform. We think of the specialty business as an important strategic element.

“The reality is that change is coming to the insurance market, change is accelerating. Nothing in life is standing still and our clients’ risks don’t stand still either. Being a leader in specialty and a leader in reinsurance is precisely how you drive that change forward.”

Referring to the transaction, he said: “In terms of immediate benefits, the ability to sell the products we have across the Axa platform will be one of the quickest sources of growth and additional profit.”

Mr McGavick and Thomas Buberl, chief executive officer of Axa, have known each other for a number of years having met through the Geneva Association, an international think tank on insurance and risk management issues. In November, they met at Mr Buberl’s office in New York and discussed the direction of the industry. That meeting and follow up discussions paved the way for yesterday’s announcement.

Mr McGavick drew a parallel with the position XL Group and Bermudian-based insurer Catlin found themselves in before they merged. He said: “It was the recognition that scale matters more and more in insurance operations.

“Operating globally is essential and that is a very expensive infrastructure to maintain. And second, capital is made very dear by Solvency II and other regulatory pushes around the world. If you think about those two things alone, you realise that scale makes a huge difference in competitive position.

“We gained greater scale through Catlin, but the reality was that we were not in the final group, the top group in the world. While our board was not looking to sell, when Thomas came forward and outlined a vision for maintaining the brand, maintaining the strength and accelerating its progress from being part of this more powerful group, it was a very compelling vision.”

Mr McGavick said the deal was exciting as it was a complementary fit between companies with similar approaches to customer service, similar cultures and focus on innovation.

“When you add that together and realise that the overlaps are not that large, so the impact on XL people and Axa people will be less than ordinarily in such an advanced integration, this is incredibly exciting for all of us. That convinced our board and management this was the right thing to do,” he said.

The merger agreement has been unanimously approved by the boards of Axa and XL Group. XL will be combined with Axa Corporate Solutions, with Greg Hendrick, XL president and chief operating officer, to be appointed CEO of the combined entity.

Mr Hendrick was also at the Paris press conference. He said there were a number of synergies between the companies, such as the opportunity for XL’s specialty products, such as those in professional, environment and cyber lines, to be “combined with the power house that Axa is in the small commercial market space and sell to a whole new customers and distribution that we have not had access to before — particularly the smaller brokers in Europe and even some of the Axa agents”.

He added: “Axa Corporate Solutions has a great franchise in Europe; the benefit from the US underwriting expertise that we will bring to the table will only enhance the positions that ACS has with its customers and really move forward to a lead position.”

Mr Hendrick expects opportunities to leverage XL’s footprint in the US and bring AXA’s expertise to more potential clients. Regarding the future of the XL Catlin brand, he said: “We are still working together on how exactly the brand should go. We have said the XL name and the Catlin name will move forward within the Axa organisation. We have to work out the specifics of how we are going to do that best.”

In an earlier statement, Mr Buberl said: “The transaction offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects. The future Axa will see its profile significantly rebalanced towards insurance risks and away from financial risks.”

At yesterday’s press conference, he said it was intended to delist XL Group “if possible” and create an internal advisory board.

Mr McGavick will become vice-chairman of the entity created by the combining of Axa Corporate Solutions and XL Group, which will be a “sixth pillar” of the Axa group. Mr McGavick will also be special adviser to Mr Buberl, with regard to integration-related and other strategic matters.

Commenting on the deal, Ross Webber, CEO of the Bermuda Business Development Agency, said it “continues to show how attractive the Bermuda market and its companies are”.

He added: “Bermuda has yet again proven itself to be a domicile where companies can grow from the seeds of necessity-driven innovation in the mid-1980s to highly desirable multi-billion-dollar targets more than 30 years later. Larger, stronger companies — in this case creating one of the world’s largest P&C carriers — are beneficial for both the market and the industry. We continue to see new companies launching in Bermuda, and we expect this to continue.”

XL shareholders will receive $57.60 per share under the terms of the transaction, which represents a 33 per cent premium on Friday’s closing price.