French insurer AXA is reportedly considering the sale of reinsurance division, AXA XL Re, in an effort to lower its exposure to natural disasters, reports Reuters.
According to people familiar with the matter, the large insurer is discussing strategic options for the reinsurance arm which sits under AXA XL, including a possible private sale or stock market listing.
Reuters sources told the publication that talks are preliminary and may not result in a transaction.
It comes two years after mutual insurance group Covéa’s effort to acquire the reinsurance operation failed.
In recent times, AXA has made some significant reductions in the natural catastrophe exposure of AXA XL Re as the industry has faced consecutive years of elevated losses from large events and also so-called secondary perils such as floods and wildfires.
The reinsurance market is now in a hard cycle with rates trending higher, notably for cat-exposed business, and Reuters suggests that the current environment could help AXA offload the reinsurance operation.
At a time of attractive rates and pricing, the addition of AXA XL Re could be appealing for some global players that are looking to capitalise on market dynamics.
