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Questions and Answers: Scott Gunter from Ax XL



Scott Gunter joined Axa XL, a unit within Axa SA, from Chubb Ltd. in February 2020, just before the covid-19 pandemic broke through. Since taking on the top role, he has led several management and structural changes at the commercial insurer. He spoke recently Business insurance Editor Gavin Souter on these changes and the market outlook. Edited excerpts follow.

Q: How have the management and structural changes at Axa XL affected your operations in North America?

A: We had a meeting after I joined where we had some customers who came in, and one of the things they asked us to do is to organize ourselves a little more around the customers. We took it to heart and said that we will maintain our product discipline, but we will organize ourselves into three zones and the responsibility within these zones is to be customer-centered to meet and operate in the white spaces between the products.

Q: What difference does it make from a practical point of view?

A: We take on the responsibility, in collaboration with the broker, to find out who is going to meet a customer. At meetings this week, for example, we will sit with customers and say, “What are you worried about? What are your concerns?”

; and then we say, “OK, wait a minute, let’s try to organize ourselves to deal with your particular problem.” It puts the burden on us to make sure we have the right people at the table.

We received feedback that to get you through Axa XL you need six different meetings, and we try to get it down to one. It may be a longer one, but it should be one where we cover the key issues.

Q: Where do you see opportunities for growth in the next few years?

A: We did a lot of work in 2021 where we had some reinsurance work to do in the portfolio, regardless of whether it was through reduced lines or if we bought more reinsurance. We just had to make the right size for part of the business. We put out too much capacity for the premium we collected.

It’s done, so now that we’re entering 2022, growth in 2023 will come from a number of factors. There are more reasonably priced deals in 2022 than there were in 2019, so that gives us opportunities. We are interested in expanding our property lines, our primary claims business and our professional lines. And then our marine and energy operations continue to go well.

Q: What are some of the challenges for insurers at the moment?

A: Inflation is a very big challenge. You have insurers who have never lived in an inflation environment, and you have customers who have not bought in an inflation environment. We have not seen this since the 1990s and there are challenges internally and externally with it. Value insurance is a cornerstone of our business, so you need to look at what you insure and ask what the compensation cost is. It involves a lot of work between claims for damages, our risk engineers and issue guarantees to try to stay up to date. For example, when you look at the price of steel, or what the material may now be, you might say, “Well, the price has only gone up a certain amount”, but the problem is that the customer does not want to wait for the steel, so some of the complaint process, you have to say, “What do I have to pay to get to the management to get our client up and running again?” If you build a greenfield, you have to plan it all and say that the steel must get there in nine months, but in an insurance claim, the steel must get there within a few weeks and you can not pre-order it.

Then our insurers spend a lot of time with customers on their property values. It is critically important for the customer and for us because you do not want to come up with the values.

So inflation is the latest on the list, and then there are those we are dealing with in recent years – heightened disasters, social inflation – and none of that has diminished. Everything becomes a challenge for customers because you get pressure on all fronts.


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