Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City. Welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now let's go inside the ICE House. Here's your host, Lance Glinn.
Lance Glinn:
Specialty insurance is emerging as one of the most dynamic and vital segments of the insurance industry. As traditional policies struggle to keep pace with fast-evolving risks like cyber threats, climate events, and geopolitical volatility, specialty insurers are stepping in with tailored high-impact solutions. The rapid expansion of the excess and surplus markets reflect a growing demand for flexibility, innovation, and deep underwriting expertise. Businesses today need coverage that adapts to complexity, not avoids it. Axis Capital, that's NYSE ticker symbol, AXS, has emerged as a leading force in specialty insurance, known for crafting tailored solutions to address today's most complex and evolving risks.
Through a steadfast commitment to underwriting excellence and innovation, the company continues to adapt to an increasingly dynamic risk environment. At the helm is CEO, Vince Tizzio, who's guiding Axis with a strategic vision, driving growth, deepening capabilities and positioning the company for long-term leadership in the specialty space. Vince, thanks so much for joining us Inside the ICE House.
Vince Tizzio:
Nice to be with you, Lance.
Lance Glinn:
So in April you rang the bell celebrating your two-year anniversary as president and CEO of Axis Capital. Two years that have seen great growth for the company. Now, I may be a little bit biased, but when companies, honorees, leaders ring the bell, I personally see it as a real symbol of achievement. So standing up on that podium, ringing in the bell, what did that moment mean to you?
Vince Tizzio:
Well, for me it was symbolically really important. Lance, we were here two years before, a couple of weeks ago, and at that time we were celebrating an anniversary on our listing. And in candor, we were in a tough financial place. Financially, we just weren't able to connect all the dots. And so here we come, fast forward two years later and we're talking almost about a different company. So for me, symbolically, it was incredibly rewarding. I looked at a number of our colleagues that were able to be with us. It was our extended leadership team was here, we assembled them from throughout the world, and it was about 85 of us. And I just thought of many of them that had been with us for so long.
Lance Glinn:
And two years of success under your leadership. And we talk about achievement and speaking of achievement, you're just coming off recently Q1 earnings and it was a strong quarter for Axis Capital the first quarter of 2025. As you evaluate that Q1 and now look ahead to Q2, Q3, Q4, and beyond, what do you believe are the prospects for achievement throughout the months to come this year?
Vince Tizzio:
Well, I would say first we had an extraordinary first quarter, when you think about it, in all indices of measurement. A 19.2 return on equity, we had $3.17 of earnings per share, record production, record bottom line. That's a context that I think is important to start from. So we enter the second quarter remaining 25, fairly optimistic. I say that a little bit cautiously because we have geopolitical threats, we have economic threats, we have a trade potential tariff war that's going to ensue in a more deepened way, yet we're fairly optimistic that cool heads will prevail. Nonetheless, we're prepared. We have a strategy that we think is durable, that's resilient, and we'll be encountering whatever comes our way.
Lance Glinn:
And in your comments during the earnings call, you specifically highlighted excess and surplus as a key driver for that success over the first quarter. So what's driving the momentum in that specific sector and how do you see the role of E&S just evolving as businesses face more complex and hard to place risks?
Vince Tizzio:
I think the latter part of what you said is so incredibly important in the answer because the E&S channel exists largely because of this increasing complexity that commercial customers are facing. The complexity of their risk has driven them into what we call the E&S channel, which is a substantial channel. You have Ryan Specialty that listed here on the big board, I forgot how long ago. They're one of the largest wholesale brokers. And so for us, we're the 13th largest E&S market in the United States. We have strong optimism in the continued growth potential from that channel, and we think it's a structural channel that isn't going to go away anytime soon.
Lance Glinn:
And you also spoke in your comments to enhanced operations and how you leverage data, technology and AI. So take us deeper into that. How is it being applied to underwriting, risk analysis and just overall throughout Axis Capital?
Vince Tizzio:
And so first it's one of the core components of something we call, How We Work, which is a pseudonym of our transformation program and technology and data analytics, digitization and AI. If you think about the value chain of the customer's journey with us, we're attempting to essentially revolutionize it from a access perspective, harmonize it more from a customer segmentation perspective, bring real world, real time solutions to customers that enable the inclusion of data and analytics, instead of combing through data at the point of sale with an underwriter to automate these capabilities.
Additionally, we're bringing AI. AI is into our organization from the front end of the company all the way into the backend. The backend meaning our backend processes, our operations functions, bill collecting, et cetera. And so we're fairly excited. It's a major component of our How We Work program. Its goal ultimately is to cost optimize and to make us more productive. And we're fairly pleased about the progress we've made.
Lance Glinn:
And I think with AI, right, there's clear benefits to it, there's clear positives that come with it. There are also clear risks and clear cautions that come with it that a lot of people have. Both those in leadership positions, both everyday employees. How are you balancing first, just the intersection between using AI while also making sure you have that human touch to everything that you do?
Vince Tizzio:
My colleague Joe Cohen and I were at Davos and we had a conversation with a news outlet. And the question around our approach to AI has stayed with me, to be frank with you. Axis' first approach in dealing with AI was to create a governance council, that enabled us to make certain that we were protecting really the values of our firm. Because to your question, AI can be used in nefarious ways if not properly governed.
And so we first set up a policy around how did we intend to use AI in our company. We then send messaging out to a council that we formed and said, "We need the best and brightest of our company to help us." And then we set about priorities. And those priorities were first about optimizing our infrastructure, our cost structure, and now we're working toward the optimization of our productivity. We're in early innings in that regard, but we're pleased about the approach we've taken, the open-mindedness of our teammates to support, us making sure we protect their privacy, but also enable our business to achieve its financial outcomes.
Lance Glinn:
So as we sort of turn away from your earnings and begin to just look at Axis Capital more broadly, how would you just first and foremost describe the biggest differentiator, excuse me, for the business allowing you and the world of insurance and reinsurance to stand out and separate from competitors in the space?
Vince Tizzio:
I think first we have gone back to our roots. We're an underwriting led company. I grew up in this industry as an underwriting person. I've held a successive set of roles and responsibilities, but fundamentally I'm a trained underwriter. So that has been quite guiding and has much more meaning than simply saying an underwriter. So our philosophy and approach as a business model is driven by my past experience.
Secondly, and more importantly, we have a culture. A culture that drives our decision-taking, a culture that drives itself around the notion of being inclusive, a culture that tries to create performance management expectation without it feeling threatening or overburdening. And so you take our reset underwriting led organization, a culture, and then the investments we've taken in people, processes and our products of course. And I think that's been the winning formula for Axis.
Lance Glinn:
And so you earlier spoke to how, if you look at the company two years ago when you were here to celebrate the anniversary of a listing, it was a different company then than it is now. You were obviously named CEO in May of 2023. And since taking over, the company has been through a pretty significant turnaround, obviously as you touched to. So I want to just first reflect on those initial days. So take me through those first days, first months, first weeks, that first year. What stood out as initial goals and objectives, as well as the most urgent priorities to tackle when you began sitting in the present and CEO chair?
Vince Tizzio:
Quite a bit comes to mind. The first was, recall, I had served the company six months before my appointment as CEO. And so I got to become acquainted with people and I learned quite a bit about the frustrations, the disappointments. Recall please, when I took the CEO appointment, we were still in one of the best specialty insurance markets in the last 100 years. It was incredibly competitive and we had missed out on quite a bit of that growth, that profitability, and so there was some frustration that I really wanted to address in our company.
And the way that I set out to change our trajectory was first realized that we had an ExCo, a leadership team, that needed to understand its responsibility within the company. Ultimately, we had to restate our underwriting strategy, what was our ambition? We had to hold ourselves accountable, but we had to do it in a way that led our people with a level of knowledge and inclusion in why we're doing the things we're doing and what we thought would result from it. And as you point out, we've enjoyed almost 95% total shareholder return in the last two years. We've increased our market cap almost 70% in the last two years. And so our engagement scores of our people, our financial metrics really support our care of our colleagues, but also meeting our client's needs. So we're quite pleased.
Lance Glinn:
And you talk about these obviously quantifiable numbers that show the success that Axis Capital has had over the last couple of years. Are there any non-quantifiable measures or metrics, or just things that you see around the company that indicate to you everything that you've been doing over the last two years have been successful?
Vince Tizzio:
Yeah, sure. We have a health index that we use in our organization to understand how our people's sentiment is. We have engagement and poll surveys, we have Conversations With Vince, much like this, with colleagues that sign up. There's no obligation. They sign up every other Friday with me and we just riff. We talk about what's on their minds. And I think that kind of conversational approach that we take gives us great comfort, but we have a lot of metrics that would support our view of how the health of our organization is doing. And we have just this, we have this natural conversation with as many people as we can reach and touch.
Lance Glinn:
Was it hard originally when you took over to enact that change? Because you go through this massive turnaround, right? You could talk about it now looking in hindsight, but I'm sure it's a lot easier said than was actually done. What was it like trying to enact all these changes, trying to move the company forward, trying to get your vision across, obviously just stepping into the new role?
Vince Tizzio:
You know I had a great CEO mentor who's regrettably passed, Jim Schiro. Jim Schiro ran Zurich Financial Services. He led the turnaround following Rolf Hüppi, who led that organization. He was an American that went into a Switzerland-based organization, a very sizable company. And Jim would use the refrain, "You can't say it enough." You have to communicate what you're solving for, why you're solving for it, and how it will help people. And that was something that I took in and I can't tell you Lance, it was kumbaye, kumbaya, you know.
But there was a silent majority. A silent majority of colleagues that were long-serving that had witnessed the decade that they were with the organization, where we just didn't achieve our financial aspiration. And they asked questions like, "Why not us? Why not now? And why not us together? Why can't we do it?" And so I really pulled on that and led us with a lot of help from a lot of colleagues to where we are today.
Lance Glinn:
So I'm preparing for this podcast and I'm doing my research both on you, on the company, and I come across this Forbes article written recently by yourself, and I'm going to quote you from it. "As a global business community," this quote, "As a global business community, we must accept the reality that the past is no longer prologue." So when taking that statement and thinking about it in terms of risk management, what do you see as the biggest shifts in the landscape over the last few years, over the last two years really, since you've taken over as CEO?
Vince Tizzio:
Yeah, so I meant what I wrote, and I think it's illustrated in a few ways. Let me talk about it. So first of all, if you think about a climate and what we talk about is property insurance. The kind of risks affecting commercial insurance around the world from climate-related challenges, it could be hurricanes, it could be floods, it could be wildfires, it could be convective storms.
Lance Glinn:
We saw two recently.
Vince Tizzio:
Indeed. Any historical model that we in the insurance company world used, they're not necessarily contemporary. Secondly, we pull back on one of your questions around data and AI. The ability to synthesize information in a manner of speed that we've never seen before. The ability to bring more than pattern recognitions within the data that we see is an art form that we, frankly, I didn't grow up with as an underwriter. And then finally, it's driven by the risk landscape.
You have cybersecurity, you have energy and energy transition, you have climate, and then you have the effect here in the United States, notably, around the impact of Tort reform gaps, otherwise, sometimes known colloquially as social inflation. And the harm it's causing companies in managing their exposures to loss and their expectation of a insurance company in handling the transference of those risks. So that's what I meant. And I think finally, you have people. The ability to attract a different kind of profile of educated persons into our industry is also going to add to the mix. It's also a challenge, Lance.
Lance Glinn:
And with these evolving risks and these things that arise that when you first started in the industry may have not even been invented yet, those chains, but also the philosophy of leadership has to change with it too. And leaders I think have to grow just as obviously technology grows and as risks grow. How has your leadership philosophy changed over the last 25, 30 years since you started in the industry? And how have you over the last just couple of years really changed on a more micro level, just with Axis Capital?
Vince Tizzio:
I think the great news for me is that I was exposed to a lot of different opportunities throughout my career, probably younger than I was prepared for. And I've been in this industry a long time and have had my own maturing as a person and as a professional, and ultimately as a leader. And those learnings over these many decades that I've been in our business helped shape me and enabled me to be as prepared as I could hope to be as our public company CEO. And those learnings have enabled me to lead our company first authentically, which is incredibly, as a personal value to me, incredibly important.
Secondly, because I've worked from a file room role and responsibility as a kid during school summers in between high school graduation and college, and one year after college graduation in the basement of AIG's file room all the way to now leading our company. You never forget those lessons. And ultimately, we're a people driven business. We don't facilitate our business through merely technology. We work with people. And I think that that's an incredible skill that I was lucky to harmonize, understanding people, treating people with respect, and ultimately trying to be a good listener while leading our company toward its financial ambition.
Lance Glinn:
Did those Middletown South football games and practices help shape your leadership style?
Vince Tizzio:
Coach Mosca is a gentleman that had an indelible impression on me. I invited Coach, as I still speak to him, though less frequently than I had. I was honored by NIAF, one of the Italian-American federation groups, and I invited Coach to celebrate that honor with me because part of the honor is bestowed on someone of character. And I think Coach really inculcated me with a lot of great values in furtherance of my own parents, but a great, great person that's had a lasting impact on me.
Lance Glinn:
And for our listeners listening saying, what's Middletown South? Well, Middletown South is a high school in New Jersey that both Vince, as well as my own mother went to. They were classmates, known each other as well. So for those listening, wondering what Middletown South is, there's a little brief history of-
Vince Tizzio:
Go Eagles.
Lance Glinn:
... both of Vince's High School as well as my own mother's. One of the evolving risks that you mentioned in an answer a couple of minutes ago, you talked about cyber, right? And we spoke obviously earlier in the conversation to AI and advancing technology and so on and so forth. But when it comes specifically to those threats, how are clients approaching the need for specialty insurance, excuse me, with these emerging risks and how is Axis approaching these growing challenges that really are changing on a week-to-week basis now?
Vince Tizzio:
Yeah, so some context setting. First, we're a commercial insurance company, and so by definition, our customers work through a distribution channel. They're intermediary. So first they're supported by an intermediary that represents them and helps clarify why they have this peril, this exposure that they ought to consider transferring. We as an insurance company, you cited cyber, so I'll stay with it. We're a global 10 leader in the provision of providing cyber insurance to the corporate community of the world.
And so we've designed products that try to anticipate the kinds of exposures that our customers will face and give them a remedy by providing capital, capital protection. We provide loss services that enable those decisions. We work in close consultation with the intermediaries that represent these customers. And the risk and loss landscape of cyber is as dynamic as anywhere else in our insurance business. Why do I say that? Because the ability for persons that want to create injury or harm to a commercial concern, using cyber, is so varied and very difficult to keep pace.
You know, years ago, Lance, we talked about merely content liability, matters that were put on one's website. We then started to speak about so-called phishing losses, where people get emails and they say, "Lance, Vince has asked you to ship $10 million to his account," and they sent it. We have ransomware matters that have again been on the rise, despite people's belief that they were solely perpetrated by persons in the Ukraine or in Russia. So it's a dynamic risk landscape and keeping pace with that in the provision of terms and conditions, is what people rely on Axis Capital and many other cyber insurance providers to do. So I think it's dynamic for all those reasons.
Lance Glinn:
And in that Forbes article I mentioned earlier, you also discussed the energy, and you mentioned it earlier in our conversation too. You discussed the energy sector-
Vince Tizzio:
You bet.
Lance Glinn:
... as an emerging risk and the complexities that really come with it. How is Axis navigating, I'm talking about political developments, policy changes, just overall volatility and really all the other factors associated with this sector?
Vince Tizzio:
Yeah, we have a lot of passion for the energy sector, both the traditional energy and the energy resilience sector. We stood up a syndicate out of Lloyd's of London last year, known as Twentyfifty. We put that syndicate together in four months, solely to help the corporate world in their transition to net-zero. And we're one of many voices in the sector, but we have a lot of expertise in the energy business. We have a thriving traditional energy business here in the United States. We don't get caught up in geopolitical challenge. In the United States, of course, there's a move afoot that leans more into traditional energy, but we're a global energy provider. We have a breadth of capabilities that meets consumers where they are in their journey, and we're very proud of the work that we've done there.
Lance Glinn:
So I want to pivot now to just the overall state of the insurance industry. And currently there's a looming talent gap, right?
Vince Tizzio:
You bet.
Lance Glinn:
There's simply more jobs available than there are people actively looking for these jobs, actively pursuing these positions. What do you see as the root causes of this disconnect and how is Axis navigating this challenge?
Vince Tizzio:
So again, some context. I think we're not the best advertising industry about what we do in our day-to-day endeavors. And so I think as an industry, we could probably do better. I think we're going to be forced to do better. A factoid, I believe the Insurance Institute indicated to us that over the next two years, there is a substantial gap emerging in the provision of need, kind of aligns with what you said. Maybe more shockingly, I think it's 2035, 50% of the United States insurance industry persons have the ability to retire. Shocking numbers.
And so I think we need to do a better job, one, advertising. Secondly, a lot of the insurance industry has worked with college campuses, aiming to bring in people into our industry, first in the actual science world, the business schools, we can do more with that. Axis, we even look at adjacent industries. You know I spoke about, and you asked about data analytics. Well, why can't we go into technology companies and recruit people? Why can't we go into banks and bring some of their highly analytical persons?
So I think together we have a multi-prong effort. One, it's our traditional source production of people in our industry. Secondly, it's the continuation of bringing our message to the world around what the insurance industry does, attracting persons both in academia but also in adjacent industries. And ultimately, it's making sure that we create environments that keep people in our industry. And so I would suggest to you that we probably could do better in that last regard, where young persons come out of school, they may not be able to get a job. They know a friend that knows someone in the industry, they join the company, they have high expectation of how their career will go. I think we have to meet them where they are.
Lance Glinn:
You mentioned 50% of those in the industry could retire by 2035, only 10 years away from that date, or from that year. What does the industry look like if changes aren't made, if advertising isn't improved, if you're unable to as an industry as a whole, get those young people in those positions and keep them in those positions?
Vince Tizzio:
Yeah, it's an imperative, isn't it, right? Inferred in your question is the answer if you think about it. So companies like us that are transforming their operating models, they are inherently working with a double objective. The first is to bring efficiency. The second is to understand the role and purpose of people in the transaction cycle. And so we have a tall order at matching, bringing talent in, while also optimizing how we do things.
Lance Glinn:
So Axis also emphasizes, you've talked a lot about people and the importance of people within this conversation, Axis emphasizes mental health. And our country is currently dealing with a mental health crisis of its own. Per the Department of Health and Human Services, "76% of U.S. workers reported at least one symptom of a mental health condition. 81% of workers reported that they will be looking for workplaces that support mental health in the future." Workforces have different desires and different needs and wants than they did say 20 years ago, 30 years ago. How is Axis helping and making the workplace a positive one for employees?
Vince Tizzio:
I spoke earlier about our culture. Our culture has fundamentally people at the center of our strategy. But more broadly, we've embarked on a campaign, if I can call it as much, that listens, learns, and shares. If you think about some of the statistics that would support your premise, I think that 615 million people out of the global citizen roster have faced or are facing some mental health challenge, a trillion dollars of estimated productivity loss. How can we in the business community, that use and work with people as teammates to facilitate our business objective, ignore this, what I would describe as an epidemic?
We at Axis have done a few things. So first, we've evaluated our people strategy. We've looked at, importantly, our benefit construct. Are we being responsive? There's elder care issues, there's anxiety, there's depression, there's child care related challenges. There's individual workers that are coming to work not in their authentic self. And so we're trying to address all of that through our culture, our benefits, and we've taken that messaging and we've asked for help. We went to Project Healthy Minds, a not-for-profit based here in New York, founded by a gentleman that worked for Blackstone, left the corporate world, wanted to bring awareness, and created what I would say is a supermarket of bringing services to people where they are in all modalities.
Further, we have worked to bring advocacy in our business. And I can tell you, Lance, a quick aside, if you'll indulge me, we hold a number of producer reward events. And oftentimes we bring voice to this subject. And can I tell you, after the presentation, people don't want to really talk about the business. They want to share their story about their son, their daughter, their cousin, their relative, a friend, or bring awareness of a colleague that is in their organization. And through our conversation of listening, learning, and sharing, we're bringing awareness to this issue, empowering people to bring it forth and to work with their employers. Or we can facilitate contacts, again, through Project Healthy Minds. So for me, individually, apart from my role as CEO, it's been personally gratifying to make sure that we're making an impact that helps people when they need it.
Lance Glinn:
So Vince, as we start to wrap up our conversation, in that same Forbes article that I had mentioned previously, you began it with a quote by nuclear physics pioneer, William Pollard, who said, "Without change, there's no innovation, creativity, or incentive for improvement." So on the topic of innovation, on the topic of improvement, how is Axis fostering innovation in all aspects, whether it be insurance, whether it be culture, innovation? How is Axis fostering it to meet the rapid pace of change in the insurance and the risk landscape?
Vince Tizzio:
When I was appointed CEO, I was talking with my former CHRO, the people officer of the company, and she said, "Vince, what do you most want to achieve in the first year?" I said, "I want to change how we work." And for me, that adage became a core underpinning of our strategy. And through how we work, we're bringing all the innovation we can to bare. And that innovation is not only in technology, or AI, or data, it's in people, it's in product, it's in the positioning of those products through our marketing strategies, our distribution relationships.
We can't go to market, as we say, as a phraseology in our business, with just traditional means. And so we're really evolving our operating model and cadence to include questions. Why do we do the things that we do? Is there a different way? And the remedy often draws on innovation, and that innovation can take a variety of shapes and forms. And again, I'm quite pleased with the progress that we're making.
Lance Glinn:
And to that progress, we've spoken over the course of our conversation, two years of growth and success under your leadership for Axis Capital. So as we wrap up, how are you and your leadership team plotting the years to come, not just the next 2 years, but the next 5, 10, 15 years, so that the success that you've already achieved is sustained and even built on?
Vince Tizzio:
We have a phraseology inside the house of Axis of seeing tomorrow, today. And in doing so, it forces us, it confers upon us a responsibility to think about the investments that we're taking today, the kind of benefit or effect it'll have in our intermediate term, and making investments in the future today that safeguard those eventualities that we're not so pleased with. And so it's a carefully orchestrated strategy. As you know, execution eats strategy every day for lunch. And so we're keenly focused on making sure that we stay focused on what we're doing today, mindful about what lurks out there and tomorrow, and taking steps and measures to protect our shareholders and ultimately our employees.
Lance Glinn:
Well, Vince, let me tell you, it's a small world. You never know who you're going to sit down and talk to. You could be sitting down next to someone, or sitting down and talking to someone who just so happened to know your mom back from high school. So it was a pleasure-
Vince Tizzio:
Thank you so much for having me.
Lance Glinn:
... talking to you and thank you so much for joining us Inside the ICE House.
Vince Tizzio:
Thank you.
Speaker 1:
That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X @ICEHousePodcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.