Axa leaps into P&C space with XL acquisition
Axa says its $US15.3 billion ($19.7 billion) purchase of Bermuda-based XL Group represents a “major leap forward” for the French insurer’s global ambitions.
The acquisition, which is expected to be approved by XL shareholders and regulators, will shift Axa’s business from predominantly life cover and savings to mainly property and casualty (P&C).
“Axa will see its profile significantly rebalanced towards insurance risks and away from financial risks,” CEO Thomas Buberl said.
“XL Group has the right geographical footprint, world-class teams with recognised expertise, and is renowned for innovative client solutions.
“Our combined P&C commercial lines operations will have a strong position in the large and upper mid-market space, including in specialty lines and reinsurance, and will complement and further enhance Axa’s already strong presence in the SME segment.”
The XL operations – including Lloyd’s insurer Catlin, which it acquired in 2015 – will be absorbed into Axa Corporate Solutions, forming the French insurer’s new global P&C insurance and reinsurance division.
XL Catlin’s Australian branch has offices in Sydney and Melbourne and offers property, casualty, professional, marine, construction, upper middle market and environmental coverage.
Fitch Ratings, which has placed XL on positive watch, says the Bermuda-based insurer will be part of a “very strong, larger” multiline organisation.
As reported in a Breaking News bulletin last Monday, the two companies say the deal will create the largest P&C commercial insurer, with combined revenue of €30 billion ($47 billion) based on 2016 figures.
Completion is expected in the second half of the year. The merger agreement has the unanimous approval of both boards.