Exclusive: Axis strikes renewal rights deal for Markel’s US large financial institutions PL book

By James Thaler

March 13 - (The Insurer) - Axis has reached a renewal rights deal to take over Markel’s U.S. large financial institutions professional liability (PL) book, a move that comes after the Virginia-based insurer said last month it was streamlining its PL offering.

The renewal rights deal specifically relates to Markel’s large U.S. financial institutions book, with sources emphasising that Markel will continue to write U.S. middle market and other financial institutions business.

Axis disclosed the deal in a memo to distribution partners on Tuesday, which said that directors and officers, financial institutions E&O, bankers professional liability, employment practices liability, fiduciary liability, fidelity and blended coverage policies are all included in the deal.

In the memo, Axis said that Markel will continue to honour and service all policies and that it is “committed to working closely with Markel through this transition.”

“We are pleased to announce that Axis has secured a renewal rights agreement for Markel’s U.S. Executive Assurance Large Financial Institutions business,” said the memo, signed by Axis’ head of North America Mike McKenna and global financial lines head John Van Decker.

“This significant step enhances our position as a leading specialty insurance carrier, leveraging our broad and diversified financial lines platform,” they added.

“We are excited to share this important milestone in our growth journey. Thank you for your continued partnership and trust in Axis,” the pair concluded.

Trading partners were directed to contact Axis’ head of complex retail financial lines Adam Grosz for retail renewals or new business, as well as Doug Wordekemper, who is Axis’ head of wholesale financial lines, for new business or renewals.

Markel’s Sal Pollaro, who serves as the insurer’s executive underwriting officer for professional liability, was listed as the point of contact for policies and claims in-force.

Further details on the amount of premium subject to the renewal rights deal or the specific composition of the portfolio being transferred could not immediately be confirmed.

Axis grew its professional lines insurance gross premiums written by only 2% in 2024 to $1.16 billion, up from $1.14 billion in 2023, while the same figure in reinsurance grew by 11% to $422 million from $379 million.

In contrast, beginning in early 2024, Markel decreased writings within select classes of its U.S. general liability and risk-managed professional liability products following heightened loss cost trends and concerns around rate adequacy.

Markel’s insurance professional liability net earned premiums fell by 8% in 2024 to $1.66 billion from $1.80 billion, while in reinsurance the same figure fell by 4% to $371.20 million from $388.61 million.

Markel’s U.S. PL book took $274 million in reserve charges in 2023 and $112 million in 2024, which Markel said was driven by unfavourable claims settlements and increased claim severity, primarily on the risk managed directors and officers product line.

With its fourth-quarter results, Markel said that in 2024 it increased its attritional loss ratios on certain product classes within its U.S. PL product lines in response to unfavorable loss development trends in recent years as to include an increase in the level of conservatism on its U.S. PL and general liability product lines.

MARKEL RENEWAL RIGHTS DEAL FOLLOWS REALIGNMENT LAST MONTH

Markel’s announcement last month largely centered on the news that it is moving to have its U.S. public D&O and large financial institutions portfolios written out of Bermuda and splitting its U.S. PL division into four distinct pillars.

Markel said that moving forward its U.S. PL offering will comprise four pillars: management liability, led by Craig Graff; errors and omissions (E&O), overseen by Paul Melone; financial institutions, helmed by Travis Pearson; and cyber, managed by Lou Botticelli.

The company's U.S. PL platform will continue to be led by Pollaro, Markel’s executive underwriting officer, PL.

Markel said that as part of the “realignment”, the access point for its public D&O and large financial institutions coverage will now be through the company’s Sandra Soares-led Bermuda-based PL platform.

That operation, Markel said, is viewed as its center of excellence for public D&O and large financial institutions underwriting.

Markel noted moving the public D&O and large financial institutions team to Bermuda aligns with earlier actions it has taken to streamline access points.

Those earlier actions include Markel’s decision last September to move its London risk managed PL portfolio to the Bermuda operation.

LATEST CARRIER RETRENCHMENT

Markel’s reorganisation of its U.S. professional lines operation entailed 14 of its 22-strong U.S. public D&O and large financial institutions team being given notice in the latest example of a company scaling back its involvement in the challenged market.

As The Insurer reported in January, Argo has decided to quit the market and inked renewal rights deals for its portfolio – which is believed to have generated around $350 million in premium last year – with Westfield and Core Specialty.

As reported at the time, sources told this publication that “some but not all” of Argo’s PL-focused staff are expected to join Westfield and Core Specialty as part of the agreements.

Axis and Markel both declined to comment.