Context

As a leading global insurer, AXA faces highly sophisticated P&C challenges, among which natural catastrophe risk (CAT). Among disasters, climatic and seismic events show large variability in severity, frequency and seasonality, with impactful consequences on strategic decisions; not to mention climate change which brings added uncertainty for the future. AXA acquired in 2018 100% of XL Group Ltd, a leading global Property & Casualty commercial lines insurer and reinsurer with strong presence in North America, Europe, Lloyd’s, and Asia-Pacific, increasing the Group exposure to natural catastrophe risk.

Group Risk Management

AXA GRM brings together a high level and multidisciplinary team of engineers, actuaries, and financial analysts. Its main missions focused on the following key areas:

Job background

The position belongs to the GRM P&C CAT Risk Management (20 FTE).

The CAT modeling process is part of AXA’s Internal Model (Solvency II) and consists in:

This process has strong strategic and operational impacts since it 1. defines levels of Reinsurance covers 2. computes Economic Capital for CAT to secure AXA’s solvency, and 3. ensures the respect of AXA’s CAT Risk Appetite. It also constitutes a technical challenge though the data collection of 50 million policies, the combination of multiple modeling solutions, and the production of millions of stochastic event losses. During this process, the consideration of “scenarios”, either historical events, or potential future disasters, improves the robustness and understanding of risk assessment.

Mission

A global insurance group as AXA needs to develop a sound understanding of the frequency, seasonality, intensity, and impacts of natural hazard events. Historical records are one of the most important sources to derive such information. The purpose of this internship would be to explore the significance of adopting a seasonal or even multi-annual outlook on the evaluation of reinsurance purchase. As a global insurer, AXA’s exposure is strongly influenced by the variability of natural events, such as El Niño-Southern Oscillation (ENSO) or the North Atlantic Oscillation (NAO), and its subsequent effects on their regional severity and frequency.

The intern will investigate the optimisation potential of the reinsurance cover on a first use case with respect to the ENSO phenomenon, and particularly its relation to tropical cyclones activity in the North Atlantic, a major peril for AXA. The arrival of El Niño conditions in the tropical Pacific has been announced in June 2023. El Niño is one of the two phases of an irregular oscillation in the tropical Pacific, the El Niño Southern Oscillation (ENSO), which affects weather patterns across the world. ENSO characterized by the periodic warming (El Niño phase) and cooling (La Niña phase) alternance of sea surface temperatures in the tropical Pacific, has far-reaching implications for the weather patterns across the globe (McPhaden et al., 2006).

ENSO is a natural part of the climate system, anthropogenic warming is expected to intensify both El Niño and La Niña, resulting in much higher damages in the future.

Regarding tropical cyclones, El Niño causes an increased hurricane activity in the Pacific and decreased activity in the North Atlantic potentially diminishing the impacts of hurricanes on the US and Mexican Atlantic coasts. On the contrary, in la Niña years the hurricane activity in the North Atlantic is increased, and one may envisage adopting a more prudent reinsurance coverage.

AXA has developed a suite of modeling tools for natural events. The exploration of such seasonal effects on the gross of reinsurance risk will reinforce the internal knowledge on hurricanes and tactical options to adapt to their impacts.

The intern will actively contribute to this effort by:

Summarize their findings and recommendations based on modelling and literature for the present climate and describe possible pathways under future climate scenarios.

Votre Profil

A propos d'AXA

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