AXA XL is owned by the French insurance company AXA. AXA acquired XL Group in 2018 for $15.3 billion, making it one of the largest insurance deals in history. The combined company was rebranded as AXA XL and operates as the property and casualty commercial lines division of AXA.
Introduction to AXA XL
AXA XL provides insurance and risk management products and services on a global scale. It serves mid-sized companies to large multinationals, and covers over 200 countries. AXA XL offers a wide range of commercial P&C insurance products including:
- Property insurance
- Casualty insurance
- Professional insurance
- Specialty insurance
Some of the industries served include aviation, construction, energy, healthcare, manufacturing, marine, real estate, and technology. AXA XL has over 7,400 employees operating in over 50 countries. It has a strong presence in North America, Europe, Asia, and Latin America.
AXA Acquisition of XL Group
In March 2018, AXA announced the acquisition of XL Group, a leading global property and casualty commercial lines insurer and reinsurer. The all-cash transaction was valued at $15.3 billion, making it the largest insurance deal since 2015.
XL Group was purchased from its Bermuda-based parent company XL Group Ltd, which was previously listed on the New York Stock Exchange and Bermuda Stock Exchange. The acquisition immediately made AXA the #1 global P&C commercial lines insurer based on gross written premiums.
Reasons for the Acquisition
There were several strategic reasons behind AXA’s takeover of XL Group:
- Gained leading positions in high-growth P&C commercial lines and specialty risks
- Expanded presence in North America and Lloyd’s specialty insurance
- Diversification into additional lines of business such as aviation, marine, and energy
- Reinforced AXA’s commercial P&C operations and strengthened its insurance portfolio
- Increased distribution capabilities and strengthened client retention
Financial Benefits
The acquisition was expected to be immediately accretive to AXA’s earnings per share and return on equity. Additional financial benefits included:
- Expected to result in around $0.15 increase in adjusted earnings per share in the first full year
- Expected to add an estimated €1.2 billion in synergies by 2020
- Strengthened capital position and improved financial flexibility
- Enhanced underwriting capabilities and scale
The purchase price represented attractive P/E acquisition multiples compared to other insurance deals. The deal was financed through a combination of existing cash resources and debt issuance.
Profile of XL Group
XL Group had an established track record as a leading global P&C insurer serving clients in over 200 countries. Its insurance companies had excellent financial strength ratings. Here is an overview of XL Group at the time of the acquisition:
- Over 7,400 employees worldwide
- Provided insurance coverage in excess of $100 billion
- Served over 25,000 clients globally
- Major operations in Bermuda, Europe, North America, Asia, and Australia
- 2017 gross written premiums of $15 billion
- Underwriting capabilities across P&C commercial lines, specialty insurance, and reinsurance
XL Group brought extensive experience and expertise in sectors such as energy, marine, aviation, construction, and cyber risk. Its products included property, casualty, professional liability, directors & officers, and other specialty lines. The company had been in operation for over 20 years.
Business Segments
At the time of acquisition, XL Group operated through the following main business segments:
- Insurance: Provided standard and specialty P&C commercial property, casualty, and professional insurance coverages on a global basis.
- Reinsurance: Wrote property, casualty, professional liability, and specialty reinsurance on a worldwide basis through brokers and directly with clients.
- Life & Annuities: Focused on managing closed blocks of life and annuity insurance policies.
Leadership
XL Group’s senior leadership team had extensive insurance industry experience. Key executives included:
- Mike McGavick – Chief Executive Officer
- Stephen Catlin – Deputy CEO & Chief Executive of Insurance
- Myron Hendry – Chief Platform Officer
- Greg Hendrick – Chief Insurance Operations Officer
- Paul Brand – Chief Underwriting Officer
Former CEO Mike McGavick continued serving as XL Group’s CEO after the acquisition to help oversee the integration.
Integration of XL Group into AXA
After completing the XL Group acquisition in 2018, AXA moved quickly to integrate the business. The combined commercial P&C operations were rebranded as AXA XL to represent a unified identity.
AXA XL retained its headquarters and main centers in key cities where XL Group had major operations including New York, London, Bermuda, and other global hubs. The existing XL Group management team remained in place during integration.
Organizational Structure
AXA organized XL Group into a new division named AXA XL, consisting of the following units:
- XL Insurance – encompassing XL Group’s insurance segment
- XL Reinsurance – encompassing XL Group’s reinsurance segment
- AXA Corporate Solutions – AXA’s large corporate insurance division
- AXA Art – AXA’s fine art and collectibles insurance division
By combining XL Group’s operations into AXA XL, the organization optimized expertise across specialized underwriting, claims, and actuarial functions.
Business Strategy
AXA utilized XL Group’s capabilities to strengthen its positioning in commercial P&C while diversifying its business mix. The key focus areas included:
- Expanding specialty commercial P&C lines such as aviation, marine, and cyber insurance
- Growing presence across North America, Europe, and Asia-Pacific regions
- Leveraging synergies in distribution networks and client relationships
- Embracing digital transformation initiatives across underwriting and operations
- Applying data analytics capabilities across the value chain
AXA XL continues operating as an integrated division aligned around a shared vision of providing innovative risk solutions globally.
AXA’s History and Profile
AXA XL is now an integral part of the AXA Group, a worldwide leader in insurance operating across Europe, Asia, the Americas, and Africa. Here is an overview of AXA:
- Multinational insurance company headquartered in Paris, France
- Founded in 1816 and publicly listed on the Paris Stock Exchange
- 102 million customers in over 50 countries
- Largest European insurance brand and #1 global insurance brand (Interbrand 2021)
- Over 160,000 employees worldwide
- Core business lines include property & casualty insurance, life & savings, and asset management
- Leader in property & casualty commercial lines insurance worldwide
Global Operations
AXA operates across five major geographies with strong positions in both mature and emerging markets:
Region | Major Countries |
---|---|
Europe | France, Germany, UK, Italy, Spain |
Asia | Japan, Hong Kong, China, Thailand, Indonesia |
Americas | US, Canada, Mexico, Brazil, Colombia |
Africa | Morocco, Nigeria, Egypt |
Middle East | UAE, Qatar, Lebanon |
AXA XL’s integration expanded AXA’s distribution capabilities and client reach across these international markets by leveraging XL Group’s extensive global footprint.
Financial Highlights
AXA reported €99 billion in total revenue in 2021. Other key financial figures include:
- €73 billion in property & casualty revenue
- €22 billion in life & savings revenue
- €24 billion in health revenue
- €7.6 billion in net income
- €1.6 trillion in assets under management
The addition of XL Group contributed meaningfully to AXA’s P&C commercial lines growth and diversified its insurance portfolio. AXA continues investing in emerging markets while consolidating its strongholds in Europe.
Conclusion
AXA XL operates today as the commercial P&C and specialty risk division of AXA Group. The transformative acquisition of XL Group in 2018 made AXA the leading global commercial lines insurer and expanded its capabilities in specialty sectors.
AXA XL retained the expertise of XL Group’s management team and global workforce during integration. It continues leveraging the strengths of XL Group across underwriting, claims, reinsurance, and specialty insurance. The combined division represents an insurance powerhouse positioned for growth across both mature and high-potential markets worldwide.