Buberl introduces AXA XL brand

Upon closing of the acquisition of the XL Group, the AXA XL-branded unit will combine the group’s P&C commercial lines and specialty risks, AXA CEO Thomas Buberl said in a blog.

The AXA XL offerings will include XL Insurance, XL Reinsurance, XL Art & Lifestyle, and XL Risk Consulting.

French insurer AXA is acquiring Bermuda-based property/casualty commercial lines re/insurer XL Group for $15.3 billion (€12.4 billion) in cash.

Fitch Ratings has threatened to downgrade AXA following the plan to acquire XL Group due to financing risks related to the planned IPO of AXA’s US subsidiary AXA Equitable Holdings (AEH).

However, on July 10, 2018 S&P Global Ratings affirmed the issue ratings on AXA's debt and removed all the ratings from CreditWatch, where they had been placed with negative implications on March 6, 2018.

S&P expects the proceeds from further AEH share sales to alleviate the negative impact on AXA stemming from the XL acquisition in the form of goodwill and XL's capital requirements. The agency also expects AXA's capital adequacy to improve through retained earnings. The XL acquisition and AXA's eventual sale of its US subsidiary AEH will help the group shift its exposure from financial risk to insurance underwriting risk, in line with AXA's public strategy. Moreover, S&P considers integration risks to be limited, since XL's management will be in control of the combined XL-AXA corporate property/casualty (P/C) business, and both groups have the objective of reducing XL's exposure to catastrophe risk.

The XL deal is set to transform the insurance group into the global leader in commercial P/C lines, combining XL's specialty commercial lines with AXA Corporate Solutions (ACS). The acquisition will also provide a profit contribution from XL that generates material revenue and cost synergies in both insurance and reinsurance.

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