AXA has gained regulatory approval for its previously announced plans to transform AXA S.A., the holding company of French insurer AXA Group, into the company’s internal reinsurer via a merger with the Group’s current captive internal reinsurer.
The plans were first revealed back in February 2022, with the initiative intended to enhance capital fungibility across the group, in line with its capital management policy.
AXA S.A. has now obtained its reinsurance license from the Autorité de contrôle prudentiel et de résolution (ACPR – the French Prudential Supervision and Resolution Authority).
As a licensed reinsurance entity, AXA S.A. will reinsure part of its European P&C carriers through annually renewable quota share reinsurance treaties.
For 2022, the expectation is for 25% quota share reinsurance treaties, AXA says.
The transformation will be complete following the merger of AXA S.A. and its captive reinsurer, AXA Global Re, currently expected at the end of June 2022.
AXA Group expects more than €2 billion in additional cash at AXA S.A. by 2026 as a result of this initiative, of which more than €1 billion will be received by 2023. This is comprised of a one-time cash impact resulting from the merger of the two firms, and accelerated cash remittance.
