Axa’s acquisition of XL Group to create the industry’s largest global P&C carrier by business written is not just about scale, president and chief operating officer of XL Group, Greg Hendrick has said.
Speaking to Re-Insurance at the Monte Carlo Rendez-Vous, the XL veteran said that while the combined companies would obviously offer increased scale, it wasn’t the “be all and end all”.
“Axa-XL isn’t just about size for size sake,” Hendrick said. However, he noted: “Yes, being part of something bigger gives you the spectrum of risk and the spectrum of geography.
Hendrick – who will become CEO of Axa XL, leading the division of the French powerhouse when the deal closes later this year – said the scale of the combined companies will allow the carrier to better service clients.
“Any customer anywhere in the world will be able to walk in and we can service them from life to health if they’re an individual,” he said.
“On the business side, we’ll be able to service SMEs right through to what XL Catlin has traditionally focused on – the large corporate and specialty space,” Hendrick added.
However, he said that the main benefits will be felt on the primary side. “On the insurance side it’s about being closer to the customer,” Hendrick said.
“On the reinsurance side, it’ll very much continue along the same path – it’s about having access to a wider capital base,” he went on. “It’s the insurance side we’ll see most of the lift.”
Since Axa agreed to buy XL Group in a $15.3bn (EUR12.4bn) all cash deal in March, Hendrick said both carriers had been in “full integration planning mode”.
However, he said until the deal completes it isn’t possible to determine how the portfolios will change due to competition laws. “We remain competitors,” Hendrick explained.
“We can’t really share any meaningful data in terms of assessing client overlap,” he added. Hendrick singled this out as the “greatest challenge” of the acquisition. He explained XL and Axa had set up a data room in order to share top level information, but said both companies can’t share any granular data until the deal closes.
“We’re aware of the overlap on some clients, we’re just not sure exactly what accounts,” Hendrick said.
Hendrick acknowledged there was “very heavy overlap” in Europe, which he said was to be expected considering the presence Axa has on the continent, however outside of this he said there was little cross over for the carriers.
“XL has the reinsurance business, insurance in North America and all of Lloyd’s,” Hendrick said.
As the close of the deal approaches, Hendrick said uniting both work forces will be another significant challenge that XL and Axa will jointly have to overcome. “Most people simply don’t like change – it’s natural,” he said.