AXA will fold its captive reinsurer into parent to better upstream cash

French-based global insurer AXA will shift its group's internal captive reinsurance to its home office to help grease the group's cash remittances to the parent company.

The parent holding company AXA S.A. would become a licensed reinsurer and absorb its current captive internal reinsurer, AXA Global Re, in a merger, AXA said in tandem with its Q4 2021 earnings release.

AXA S.A. intends to reinsure part of its European P&C carriers through annually renewable quota share reinsurance treaties.

The move is designed to help grease the flow of cash from throughout the group to the parent company, critical for getting remuneration to shareholders of the market-listed parent.

The group expects above €2 billion in additional cash back at the parent by 2026 as a result of the move, including a one-off cash boost from the merger. Some €2 billion is due by end-2023, including €700 million on the value of the captive and €300 million on the improved cash upstreaming.

AXA hopes to implement from end-June 2022, pending regulatory approvals, officials told the Q4 earnings conference.