For full-year 2024, AXIS Capital ceded $323 million of prospective reinsurance premiums to its Monarch Point Re casualty insurance-linked securities (ILS) platform, which was an increase of 13% over the prior year. In addition AXIS earned an increased level of fees and commissions from the ILS structure.
AXIS Capital teamed up with sector focused investor Stone Point to launch Monarch Point Re in 2023, after a more than $400 million capital raise.The Monarch Point Re vehicle operates as a kind of third-party capitalised casualty reinsurance sidecar structure, with a total return approach.
We’d reported after one of AXIS’ quarterly results statements that in 2024 AXIS had been sharing more of its risk with third-party investors, its so-called strategic capital partners.
Now, it’s clear that some of these increased premium cessions were related to the Monarch Point Re casualty ILS vehicle, as AXIS ceded its $323 million of prospective reinsurance premiums last year, up 13% from the $287 million ceded in 2023.
As we reported in January, AXIS Capital reported a meaningful 39% increase in fee income generated from its work with third-party investors for full-year 2024.
It’s likely at least a portion of this is related to acquisition costs and administrative fees earned from Monarch Point Re, while AXIS likely also benefits from profit shares through the vehicle, although these do not seem to be disclosed at this stage.
It’s worth noting that losses ceded to Monarch Point Re during 2024 were also higher, at $214 million compared to just $37 million in 2023.
Part of this will be down to the ramping up of the Monarch Point Re ILS platform, as 2023 was its first year of operation.
It will be interesting to see how the Monarch Point Re casualty ILS platform continues to scale for AXIS, as well as how that translates into fees earned over time.
With Stone Point managing the investment portfolio for this portfolio of casualty business, AXIS stands to benefit not just from underwriting or performance related fees, but also from income and capital appreciation related to the investments, making this a casualty sidecar following a total-return kind of approach.
AXIS has continued to build-out the Monarch point Re casualty ILS platform for 2025, having registered a fourth collateralized insurer class of company in Bermuda to support further expansion.
