Rowland Mayor

Rowland Mayor from RBC Capital Markets asked for clarification on AXIS Capital's reinsurance growth guidance, specifically if the 'down up to 10% or down double digits' figure includes the motor renewal, and if that motor renewal effectively occurred twice in 2025. He also questioned whether the lumpiness of buybacks in 2025, influenced by Stone Point deals, should be expected to smooth out in 2026, and if the 100% payout ratio seen in 2025 would recur.

Answer

CFO Pete Vogt clarified that the motor renewal did not occur twice in 2025; it was a new 15-month product in Q4 2025, set for renewal in Q1 2027. He emphasized that the guidance for reinsurance decline is more reflective of market conditions in long-tail casualty lines. Regarding buybacks, Pete Vogt explained that the elevated payout ratio in 2025 was partly due to the Enstar LPT transaction, which boosted capital and allowed for more share repurchases. He stated that buybacks would continue to be opportunistic and could still be lumpy in 2026, depending on market conditions and growth needs, but that a payout ratio as high as 100% is unlikely to recur.

Rowland Mayor with RBC Capital Markets asked for confirmation that the projected reinsurance growth reduction (down up to 10%) includes the impact of a specific motor renewal, and whether that motor transaction effectively renewed twice in 2025. He also inquired if share buybacks in 2026 would be smoother than the lumpy 2025, and if the 100% payout ratio seen in 2025 would repeat.

Answer

CFO Pete Vogt clarified that the motor transaction was a brand-new 15-month product in Q4 2025, not a double renewal, and its impact is included in the reinsurance outlook, which is primarily driven by market dynamics in long-tail casualty lines. Pete Vogt stated that 2025's lumpiness in buybacks was due to opportunistic actions and the benefit from the Enstar LPT transaction, which elevated the payout ratio. He expects buybacks to remain opportunistic and potentially lumpy in 2026, and that a payout ratio as high as 100% is unlikely to repeat.

Rowland Mayor with RBC Capital Markets inquired about the implied negative growth in Accelerant's gross written premium guide and the associated expense shifts when moving business from on-balance sheet to direct capital providers. He also asked about the 90 new products launched in the last 12 months, seeking insights into new exposures or demand for future products.

Answer

Jeff Radke, Accelerant's Co-founder and CEO, explained that gross written premium growth on Accelerant's side would moderate and eventually flatline as business transitions to third parties, with some cost shifts expected but margins held constant. Ryan Schiller, Accelerant's Head of Strategy, clarified that new products primarily involve book rolls and new launches within commercial SME, reflecting industry specialization and platform flexibility rather than appetite expansion.

Rowland Mayor inquired about the implications of negative year-over-year growth in Accelerant's gross written premium due to migration to direct exchange, specifically asking about associated expense shifts. He also asked about new product launches, seeking insights into new exposures or demand for upcoming products.

Answer

Jay Green, Accelerant's CFO, confirmed that gross written premium on Accelerant's balance sheet would moderate and flatline as business transitions to third parties, expecting some cost shifts but stable margins. Ryan Schiller, Head of Strategy, explained that new products primarily involve book rolls and new designs with existing members, focusing on increasing specialization within commercial SME business rather than expanding underwriting appetite.

Rowland Mayor, on behalf of Mike Phillips at Oppenheimer, requested details on loss trends in the commercial auto book and asked how growth expectations are split between new hires and existing business, including how new business is reserved.

Answer

CEO Andrew Robinson detailed three distinct commercial auto buckets with varying loss trends, noting their caution is driven by potential severity increases without tort reform. He confirmed that for new business, they apply a greater reserving margin above their indicated loss pick and hold a 'corporate IBNR' for additional risk margin on in-year launches.

Rowland Mayor of Oppenheimer asked for the size of the adverse development in the construction defect book, which lines are still seeing favorable development, and whether Kinsale is adding extra conservatism to casualty reserves. He also asked if the buyback signals a change in growth expectations.

Answer

Executive Michael Kehoe did not size the construction development but noted it was addressed with pricing and underwriting changes. He stated favorable development is occurring across almost the entire book. He affirmed that Kinsale has been adding to reserve conservatism for years due to factors like social inflation. The buyback is driven by excess capital generation from high profitability (28% ROE) against a stable 10-20% long-term growth outlook, not a change in that outlook.