Learning through pain – Axis Capital CEO Vincent Tizzio on $425m reserve charge

Some of the best lessons come through pain. That was one of the messages from Axis Capital CEO Vincent Tizzio on the (re)insurer’s $425m reserve charge in 2023.

The reserve charge was taken following rising claims within its legacy casualty and liability book of business.

“We had a lot of learnings through pain, economic pain”, Tizzio said. 

“What we learned was you have to have a lot of humility, and you have to have a lot of vigilance in pricing this business. 

“And so our appetite has been described as selective, opportunistic, and that we’re not trying to be all things through all people.”

Selective appetite 

Axis Capital’s principal business in liability is excess and surplus lines. 

Meeting those tailored risks will ‘serve the business well’.

Tizzio explains: “I’m an underwriter by training, and so I have expectancy that there’s enough class codes for us to bring our capital to bear. 

“I think our team in the United States, through our wholesale business, the principal part of where that liability is underwritten is ready to meet the needs, and it’s very stated, but yet select appetite.

Tizzio’s insurance roots

Tizzio is steeped in insurance. Although he trained in law, his father worked for AIG, and the lure of working for insurance was strong. 

He’s been in the industry 30 years, starting at Johnson and Higgins, now owned by Marsh. 

Tizzio has enjoyed a stellar career, working in senior positions at AIG, Zurich, The Hartford and The Navigators.

Today, he heads Axis Capital, a specialty reinsurer with 2,000 staff across the world.

Being special

Tizzio is clear eyed on Axis strategy: the firm aims to be a best-in-class specialist (re)insurer. 

Business is split roughly a quarter reinsurance and three quarters insurance.

It’s specialism across North America and the London Market means it targets capital deployment in a laser-like way, focusing on profitable segments.

The beating heart of the company is its commitment to innovation.

Tizzio explains: “Last year, we announced an objective of delivering some $600 million from new and expanded capabilities, and as we enter new customer segments, we bring more of our global product capability to North America, and we start new propositions that are specialty, whether it be deep in capabilities in environmental, new capabilities in life sciences, E&O and expanding wholesale appetite in our construction business.”

Axis is also focused on efficiency, aiming to improve its expense ratio. In 2024, return on equity was 18%.

Expanding the Axis team 

The insurer fosters a positive work environment, where staff are valued.

When asked by host Mark Geoghegan about acquisitions, Tizzio explained there was potential if a purchase could enhance the company’s capabilities.

However, the focus was on building on its people. 

“I think there’s plenty of reason to use our capital inside the house of Axis to continue to bring teams of people. 

“Over the next several weeks, we’ll be announcing a number of other teammates that are joining us at Axis. 

“We’re investing heavily in our how we work programs which require technology dollars, data and analytic dollars, people, investments. 

“We’re rolling out a major training program for our colleagues within the Axis family in 2025 so there are a number of planned expenses that we’re going to be bringing in.”

The full interview covers data, analytics, artificial intelligence, managing general agents and facilities.