AXA XL"s Paul Howard lays out insurance giant"s coverholder appetite


This article was produced in partnership with AXA XL

Mia Wallace, of Insurance Business, sat down with Paul Howard (pictured), head of coverholder and alternative distribution, UK & Lloyd’s at AXA XL, to discuss the insurer’s DA appetite.

Opportunity, innovation and the spirit of partnership are the trademarks that differentiate the Delegated Authority (DA) market, and in his role as head of coverholder and alternative distribution, UK & Lloyd’s at AXA XL, Paul Howard (pictured) gets to see each displayed at their finest. It’s an interesting class, he said, characterised by a measured and long-term-orientated approach to success that never finds itself at odds with the opportunity to do something different, differently.

“There’s a lot of innovation that goes on in DA,” he said. “You might think - why on earth would we delegate business when we’ve got 250 underwriters in London, you might think surely we see everything we want to see. And when it comes to the larger business, yes we do, but we have our DA contracts so that we’re partnering with people who have a niche or specialty, and access to a distribution we mightn’t otherwise have.”

It is because coverholders are so close to the clients – in many cases physically – that they have the opportunity to trial out new ideas, and because of their generally smaller size they can react more quickly to respond to what their clients are looking for. It’s that mutual learning that sets apart a great DA partnership, he said, as well as its inherent durability. With the open market business, you can win an account one year and lose it the next, but DA is a long-term play. It takes a while to set up, as both sides of the equation get to know each other, but with the pieces lined up, you grow together.

“We’ve been doing this business for 30 years,” he said, “We’ve had some of our partners for 30 years, and we’ve partnered with others only relatively recently, because it is a dynamic book. And there are plenty of things that we look for in our partners, but it’s important that we each take that long-term approach.

“We’ve got DA partners that go from one extreme to the other. On the one hand, we’ve got one-person writing around £2 million, which we’ve written for six years. On the other hand, we’ve got a company that’s got 450 colleagues and puts over £1 billion into the market. That’s one of the things I like so much about this, that variety. This isn’t one-size-fits-all.”

With that diverse approach to finding new opportunities in mind, Howard highlighted the reach of AXA XL’s DA appetite. Its top-four classes cover property, casualty, life, accident & health, and crisis management but ultimately all its underwriters can do DA business. Each underwriter has their underwriting authority, he said, and AXA XL has a specific DA training programme which, when successfully completed, means each underwriter can write DA business subject to the limits of their underwriting authority.

“So, an underwriter can’t just write a piece of delegated authority [off the bat], because it is different,” he said. “And looking at our current book, we have about 600 or so different binding authorities and what we tend to look at, is where we can be complementary to what we write rather than conflicting. If it’s business we can see in that open market that we have access to or could be written by another part of the Group, as we would avoid it as we wouldn’t want to be our own competition.

“[…] And it’s also about choosing those partners that we think we can really add value to. While we do have a lot of monoline partners where we just do one line of business, with probably about half of our partners, we do at least one line of business. And in one of our top partners, we do six lines of business. So one of the things that we look for there is, how can we make our partner’s proposition more attractive by blending in more coverages which their clients need?”

Working with such a range of businesses across such a variety of coverage business lines is both satisfying and rewarding, he noted, as it offers the opportunity to see a lot of interesting niche opportunities first-hand. A lot of what Howard and his team do is about nurturing and coordinating the relationship between the broker and the underwriter, he said, and ensuring that AXA XL’s DA partners get an ‘AXA XL view’ rather than a view limited to the applicable business line.

In addition, the team offers an additional triage to any opportunity that comes in because it recognises that whether they are speaking to a coverholder or a broker, a quick response makes all the difference. Whether it’s something the insurer does not write – and there’s not much this applies to considering the insurer writes 30 plus different lines of business – or an area where AXA XL already has a partner, it’s important not to waste anybody’s time.

“By responding quickly and delivering that service, then hopefully, next time there is a suitable opportunity we can work together,” he said. “But that’s a key part of the process, that initial triage. And then the next stage is that if it is something we can potentially work on together, then effectively I’m a glorified matchmaker.

“As a generalist, I have an overall view of our appetite and I get the people who know what they’re talking about together, so they’re not wondering which of our 250 underwriters they should be speaking to. I help put the teams together to make sure that we deliver on our actual potential in that situation.”

What fundamentally sets apart prospective DA partners, is that they offer something distinctive, he said, something with a niche specialism whether that’s geography, trade, sector, or access to expertise. If it’s a distribution that AXA XL wouldn’t otherwise have access to, then its DA team is keen to explore how they could add something different to the coverholder in question.

“We’re primarily a specialty underwriter,” he said, “but within our top areas – property, number one and casualty number two, we’re not in the vanilla property or casualty because the composites can do that very well. We’re interested in the more niche business within that, where we can offer a solution that others can’t.”

From a territorial split, AXA XL’s top terrority is the US, followed by the UK, then Canada, then Australia. However, he noted the book isn’t limited to English-speaking territories, with around 22 countries represented across the portfolio.

“Typically, we tend to lead on the DA space,” he said, “It will vary by class but, roughly speaking, we’re about 50:50, Lloyd’s: Company. To us, it’s about offering the solution that someone wants. If they want the company paper, they can have the company paper. And in many of our areas, one of the key advantages is the Lloyd’s licenses. For many coverholders, to have the cachet of the Lloyd’s brand is important. So, we just try to adapt our offering to what the partner and their clients want.”

Paul Howard has served the insurance profession for over 35 years. He joined AXA XL in September 2018 where he has served in several senior leadership roles, before taking on his current role as head of coverholder and alternative distribution, UK & Lloyd’s at AXA XL in April 2022.

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