In a recent interview with Reinsurance News, AXA XL Re Chief Underwriting Officer (CUO) Jonathan Gale shared his insights into market dynamics, challenges and opportunities in 2026.
Gale oversees underwriting strategy and risk selection across all major categories, ensuring the firm remains a valued partner to strategic clients and brokers and maintains a balanced gross and net portfolio while continually thinking about how to build the business for the future.
When asked about expectations for the crucial 1/1 renewals, Gale noted, “2026, and possibly 2027, are expected to be what we call ‘transition markets’ (the period between hard and soft markets) where the entire portfolio and all major categories except network are expected to receive adequate rates.”
He continued: “Having said that, interest rate adequacy is declining rapidly, primarily due to intensifying loss trends, inflation rates remaining elevated for an extended period in most major economies, and a moderating interest rate environment in real estate and short-tail specialty sectors not helping matters.”
Regarding specific categories, Gale explained: “Property insurance continues to offer the best opportunity from 2023 to 2025, with insurance adequacy declining but at higher levels. Despite well-publicized loss activity in 2025 and previous years, specialty rate adequacy is moderating due to increased competition in the primary insurance and reinsurance markets. Casualty rate adequacy remains unchanged as loss trends broadly offset increases in base rates, particularly in the category of bodily injury. U.S.”
Looking back at the challenges and opportunities through the end of 2025, Gale noted, “Managing transforming markets is both our greatest challenge and our greatest opportunity. We believe the alpha of our business comes from having the right gross and net product mix; and partnering with the right customers.” If we like a client and its various projects, we invest a lot of our comprehensive capabilities to ensure relevance.
He stressed that underwriters must have sufficient aggregate capabilities to remain relevant, provide excellent service and ensure best-in-class cedants acquire the required capabilities. Gale explains how the company relies on comprehensive data and analytics to achieve this goal:
“We leverage all available data and analytics, coordinating cross-functional teams; underwriting, actuarial and finance, to plan at the treaty level.
Looking ahead to 2026, Gale outlined the company’s expectations and strategies for navigating market cycles. “Our expectations for January will remain consistent in 2026.
He emphasized the importance of a rigorous underwriting philosophy: “Our deep-rooted underwriting philosophy, detailed renewal planning at the treaty level, and proven predictive pricing metrics such as rate adequacy and loss ratios give our underwriters the confidence to conduct business.”
Gale also highlighted the advantages of operating collaboratively across geographies, stating: “Operating as one reinsurer, regardless of geography, allows for efficient deployment of capacity and ensures we provide consistency to clients and brokers, regardless of where they access us.”
He concluded by highlighting the company’s strengths in security, data and analytics, and expertise: “Our AA-security, best-in-class data and analytics, and most importantly our people, give us the confidence to navigate and grow in any market conditions we face.”
