AXIS CAPITAL Risk Management International Insurance Society July 10, 2007 David B. Greenfield Chief Financial Officer
Jan 17, 2018
AXIS CAPITAL
Risk ManagementInternational Insurance Society
July 10, 2007
David B. GreenfieldChief Financial Officer
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Introduction
AXIS Capital and Risk Management
Risk-Based Capital and Solvency II
External Influences on Capital Adequacy
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AXIS at a Glance Approximately $6 billion market capitalization (June 1, 2007) $4.1 billion common equity and $5.1 billion total capital 690 employees in Bermuda, Europe, U.S. and Australasia Ratings of A (S&P - positive), A2 (Moody’s - stable) and A (AM Best - stable) $3.6 billion in gross premiums written (GWP) in 2006 6th largest by 2006 GPW and 5th by total capital in Bermuda
GPW by Segment2006 GPW = $3,609 M
AXIS Re43%
AXIS Insurance
57%$0
$1,000
$2,000
$3,000
$4,000
2002 2003 2004 2005 2006
AXIS InsuranceAXIS Re
$1,108
$2,274
$3,012
$3,394$3,609
($ in millions)
Gross Premiums Written 2002 - 2006
’02-‘06 GPWCAGR = 34%
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Success at AXIS
People
Well-capitalized Operating Structure
Strong Risk Management
Culture
CORESTRENGTHS
High-Quality Balance
Sheet
Diversified Revenue
& Earnings Stream
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Risk Management Structure
Risk Committee of Board
Chief Risk Officer
Risk Management Committee
Business Unit Leaders and Line Personnel
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The Pillars of AXIS Risk Management
Business units responsible for
identifying, assessing, taking and
mitigating risk
Business leaders ensure appropriate limits, policies, procedures, and measures in place
(with input from Risk Management Committee)
Audit function independently
tests and verifies controls are in
place and functioning
properly
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Underwriting Risk Management and Operating Approach
Disciplined Risk
Selection Self Audit
Process
PeerReviewProcess
Adjustment of Strategies
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Investment Risk Management and Operating Approach
Board Oversight
Benchmarks
Risk Budget
AssetAllocation
Investment Constraints
Manager Selection
Monitoring
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External Impact to Risk, Financial and Capital Management
Risk Management.
CapitalManagement
C a p i t a l A d e q u a c y
Shareholder Performance
Capi
tal M
arke
ts
Solvency/Economic Capital, RatingAgencies and Regulators
FinancialManagement
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Risk-Based Capital vs. Solvency II
RBC (1) SOLVENCY II
1. Quantitative
2. Qualitative
3. Standard Model
4. Company Specific RiskModel
5. Regulatory Review & Validation of Internal Model
6. Regulatory Action Based on Quantitative Results
7. Regulatory Action Based on Qualitative Results
8. Capital Disclosure Requirements
Note: (1) Risk-based capital as developed by the US National Association of Insurance Commsioners
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Capital Adequacy
Rating Agencies
Companies
Regulators
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Standard & Poor’s Capital Model in Context
Capital model
Industry Risk
Capitalization
Investments
Competitive position
Liquidity
Operating Performance Management and
Corporate Strategy
ERM
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Summary
Strong risk management program is an important ingredient to business success
Risk management culture must be embeddedthroughout the Company
Risk management is an iterative and evolutionary process