AXA S.A., the holding company of French insurer AXA Group, is to be transformed into the company’s internal reinsurer via a merger with the Group’s current captive internal reinsurer.
Under the plans, AXA S.A. will become a licensed reinsurance entity once it has absorbed AXA Global Re, the existing captive.
The idea is for the company to 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, explains AXA.
The global insurer says that this initiative looks to enhance capital fungibility across the Group, in line with its capital management policy.
The transformation is expected to close by the end of June 2022, subject to regulatory and shareholders approval, with retroactive effect for the new reinsurance treaties to January 1st, 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.
