Axis Re’s Haugh: Reinsurers head into 1.1 focused on stability and push for profitability

Reinsurers are approaching the 1 January renewals with a clear push for stability and a desire to defend their profitability as the market continues to navigate a variety of headwinds, Axis Re's Ann Haugh has told The Insurer TV.

The (re)insurance industry is currently navigating a period of unprecedented change and uncertainty conditioned by the geopolitical landscape, economic and social inflation, rapidly evolving cyber risks, the prevalence of AI and technology disruption, Haugh said.

And according to the Axis Re executive, those challenges “solidify the purpose of our industry in ensuring that we’re responding to the evolving needs of our respective clients”.

From reinsurers’ perspective, Haugh said there is a clear need for stability alongside a drive for the current period of profitability to continue.

“It was a long time coming,” Haugh said of the positive results that many reinsurers booked in 2023 and through the first half of this year. The executive said that the push for profitability needs to remain.

“One year doesn't necessarily make up for a lot of years of loss activity and, looking at the headwinds we face as well, I think reinsurers are looking for stability,” she said.

Looking across the reinsurance market and considering the supply-and-demand dynamics at play, Haugh said she expects pricing to be “broadly stable”, with “a bit of an uptick” in certain lines where there have been losses or they are challenged, for example in marine, motor and cyber.

In casualty, she said pricing may also go up due to “a bit more” demand for coverage.

Concerns persist around elevated loss trends, reserve strengthening and whether the pricing on the original business should result in continued discipline among casualty reinsurers, Haugh said, particularly in some of the more challenged segments of that market like general liability and professional liability.

From Axis Re’s viewpoint, Haugh said the company will approach the 1 January 2025 renewals “with good energy”, along with “hope and excitement”.

The executive said the opportunity to speak with clients at events such as the American Property and Casualty Insurance Association’s annual conference in Chicago and the Baden-Baden industry gathering later this month is “a critical opportunity for us to articulate our risk appetite, our execution strategy, to be transparent on where we really want to lean in [and] where we might see areas of retraction or caution”.

Haugh said those events will also allow Axis Re to drill down into the programs themselves and discuss wordings, the rate environment and ceding commissions.

“[They’re] an opportunity to lay out your stall and be as transparent as you can,” she said.

“Communication is critical – being on the front foot with a clear strategy around how you're going to approach [the renewals],” Haugh noted.

At the same time, Haugh said it is important to enter the renewal season with “your internal house in order – meaning ready to be able to quote new business”.

“We're a quoting market in all our lines of business, so being efficient internally – to be able to price and be responsive in a timely manner – is critical as well.”