AXIS Capital Holdings Limited
Task Force on Climate-Related
Financial Disclosures Report
For the year-ended December 31, 2022
2 | AXIS Capital Holdings Limited TCFD Report 2022
Table of Contents
About AXIS 3
About This Report 3
Introduction 4
Our Progress 5
Governance 6
Board Oversight 7
Executive Committee and Senior Leadership Oversight 7
Enterprise Functional Teams 10
Climate Strategy 11
Our Approach 11
Climate-Related Risks 11
Physical risks 12
Transition risks 12
Liability risks 13
Exposure Management 13
Underwriting 14
Products 14
Incentivizing sustainable behavior through customer initiatives 16
Advancing the Energy Transition 17
Climate and Investment 18
Sustainable Operations 18
Partnership and Engagement 19
Impact of Climate-Related Risks and Opportunities on Businesses, Strategy and Financial Planning 20
Risk Management 22
Identifying and Assessing Climate-Related Risks 22
Physical risks 22
Transition risks 23
Liability risks 24
Approach to Managing Climate-Related Risks Within Overall Risk Management Framework 24
Process for risk management 24
How we manage climate-related risk 25
Metrics and Targets 28
Metrics Assessing Climate-Related Risks and Opportunities 28
Probable maximum loss 28
Catastrophe losses 29
Climate scenarios 29
Greenhouse gas assessments 30
Targets Addressing Climate-Related Risks and Opportunities 31
3 | AXIS Capital Holdings Limited TCFD Report 2022
About AXIS
AXIS, through its operating subsidiaries, is a global specialty underwriter and provider of
insurance and reinsurance solutions. AXIS has locations in Bermuda, the United States, Europe,
Singapore and Canada. Our underwriting operations are organized around our global
underwriting platforms, AXIS Insurance and AXIS Re. We provide our customers and distribution
partners with a broad range of risk transfer products and services, and strong capacity, backed
by excellent financial strength.
About This Report
This is AXIS’ second report aligned with the Financial Stability Board's Task Force on Climate-
Related Financial Disclosures (“TCFD”) reporting framework. This report discusses (i) governance,
(ii) climate strategy, (iii) risk management and (iv) metrics and targets. For additional information
about our environmental, social and governance (“ESG”) practices, please refer to our 2022
report aligned with the standards of the Sustainability Accounting Standards Board (“SASB
Disclosure Report”) and our other disclosures on our corporate citizenship website found at
www.axiscapital.com.
_________________________________
This report contains information about AXIS as of or for the year ended December 31, 2022. The inclusion of
information contained in this report should not be construed as a characterization regarding the materiality or
financial impact of that information. For a discussion of information that may be material to AXIS Capital, please see
our 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“2022 Form 10-K”) filed with the
U.S. Securities and Exchange Commission (“SEC”) on February 27, 2023 and our periodic and other filings with the
SEC, which are accessible on the SEC’s website at www.sec.gov and our website at www.axiscapital.com. These sources
may contain information which is more current than that contained in this report. This report should be read in
conjunction with our filings with the SEC and the other information we publish. In this report, references to “AXIS
Capital” refer to AXIS Capital Holdings Limited and references to “AXIS” “we”, “us”, “our”, the “Group” or the
“Company” refer to AXIS Capital Holdings Limited and its direct and indirect subsidiaries and branches. Climate-
related disclosures are generally handled at the Group level, except where such disclosures are in response to
regulatory requests covering a particular regulated entity.
4 | AXIS Capital Holdings Limited TCFD Report 2022
Introduction
At AXIS, we strive to help people and organizations navigate and manage risk in an increasingly
complex and uncertain world. Climate is a core focus of our Corporate Citizenship program. We
believe that climate-related risks are among the most serious issues facing the world today and
that the (re)insurance industry has an important role to play in enabling the transition to a low-
carbon economy. AXIS continues to support the development of renewable energies and the
transition to a low-carbon economy by offering comprehensive coverage and protection for
renewable energy projects worldwide.
We continually monitor, assess and respond to the opportunities and risks posed by changing
climate conditions to manage our long-term business objectives and to offer our customers
relevant products catered to their needs. In addition, we assess our own operations, including
our greenhouse gas (GHG) emissions, to mitigate our environmental footprint and to minimize
our operational impact. This report discusses our approach to managing risk related to climate
change consistent with the recommendations of the TCFD.
5 | AXIS Capital Holdings Limited TCFD Report 2022
Our Progress
UPDATES AND ACTIONS SINCE 2022
We advanced our climate initiatives in several important ways in 2022. Below is a summary of
key actions taken in fiscal year 2022 to address climate risk and the corresponding
opportunities:
Governance
• Appointed Chief Underwriting Officer in 2022 and included consideration of climate exposure management
in the position’s remit
Strategy
• Reviewed our portfolio to ensure our climate exposure was within appetite and took action or repositioned the
portfolio based on our assessments
• Announced our exit from new catastrophe and property reinsurance business as part of an overall approach to reduce
the Company's exposure to volatile catastrophe reinsurance risk. The strategic exit was driven in part by the significant
and increasing effects of climate change and the challenges faced by the catastrophe reinsurance market
• Published Environmental, Social and Governance Investment Policy Statement setting forth AXIS’ ESG investment
strategy, including an overview of its asset manager selection and oversight processes
• Became a signatory of the Global Sustainable Supply Chain Pledge, part of the Sustainable Markets Initiative chaired by
Lloyd’s of London. Launched a working group tasked with developing and implementing a global sustainable supply
chain approach for the Company
• Continued to use our voice to advocate on climate issues, including participation in organizations such as The Geneva
Association, the Insurance Development Forum and the Sustainable Markets Initiative Task Force, as well as initiatives
with the National African American Insurance Association and the University of Illinois’ Office of Risk Management and
Insurance Research
Risk Management
• Completed a transition risk analysis across our product lines and plan to use the results to inform our go-forward
business strategy
Metrics and Targets
• Announced our commitment to a 50% science-based, absolute reduction in our Scope 1 and 2 emissions by 2030
across our global operations
• Disclosed assessments of our Scope 1, 2 and partial Scope 3 GHG emissions for 2020 and 2021
• Published our inaugural climate-related disclosure report aligned with the TCFD framework, addressing year-ended
2021, and continued annual disclosures aligned with SASB, the United Nations Global Compact and the Principles for
Sustainable Insurance
• Received recognition from the Insurance Insider Honors for “ESG Initiative of the Year” for enhancing our climate
initiatives and our Fossil Fuel Policy
• Earned top ranking for "Overall Commitment to ESG" in The Insurer's Lloyd's ESG Survey
6 | AXIS Capital Holdings Limited TCFD Report 2022
Governance
We address climate-related risks through our risk oversight
process. Our governance includes oversight by our Board of
Directors, extensive involvement of senior executives and
collaboration across the enterprise with staff-driven teams and
committees. A summary of our governance structure is below
and more detailed information follows.
Underwriting
Legal and
Compliance
Risk
Management
Functional
Teams
Investments
Financial
Reporting
Marketing and
Communications
Board of Directors
(CEO is ultimately responsible for the company’s ESG strategy)
Corporate Governance, Nominating and Social
Responsibility Committee
Formulates and oversees the Company’s corporate citizenship
and ESG strategy, objectives and formal ESG reporting
Risk Committee
Oversees risks and opportunities related to the Company’s climate
change exposure and reviews and approves the Company's
Enterprise Risk Management (ERM) framework
Executive Committee and Senior Leadership
Chief Investment
Officer
is responsible for developing
the Company’s investment
policies and guidelines and
overseeing investment risks,
including in relation to
climate change
General Counsel
is Corporate Citizenship
program sponsor and has
management responsibility for
ESG initiatives
ESG Director
is responsible for the
implementation of our ESG
initiatives, including climate
Chief Underwriting
Officer
leads our underwriting office,
which includes consideration of
climate exposure management
Chief Risk Officer
leads our Group risk function,
oversight and
implementation of the
Group’s ERM framework, and
climate-focused committees
including leadership of the
climate pillar of Corporate
Citizenship Committee
Investment and
Finance Committee
oversees the Group’s
investment activities,
including receiving quarterly
reports on the portfolio’s
compliance with ESG
restrictions and the fixed
income portfolio’s aggregate
ESG rating
Corporate Citizenship
Committee
Committee Chair serves as
dedicated lead. Pillar leads
oversee priority areas
including climate
Risk Management
Committee
Chief Risk Officer chairs the
Risk Management
Committee and leads the
ERM framework
Exposure Management
including the Exposure
Management Center of
Excellence (EMCE)
owns, manages and embeds the
Company’s view of risk
Climate Change Working Group
Emerging Risk
Working Group
Natural Catastrophe Committee
Sub-Committees and Working Groups
Management Functions/Committees
Board Committees
Functional Teams
Vendor
Management
Facilities
7 | AXIS Capital Holdings Limited TCFD Report 2022
Board Oversight
At AXIS, the Board of Directors oversees sustainability matters, including climate change
strategy and climate-related risks and opportunities, and receives an annual update on
climate risks as part of its standing agenda. In addition, our Board’s committees (the
Corporate Governance, Nominating and Social Responsibility Committee and the Risk
Committee) assist the Board in overseeing AXIS’ response to climate change.
Our Corporate Governance, Nominating and Social Responsibility Committee reviews AXIS’
sustainability strategy and objectives, including those relating to the impact of climate change.
In particular, the Committee oversees:
• Overall ESG strategy;
• Company programs;
• Formal reporting on ESG and sustainability matters; and
• Policies in specific areas such as environmental management.
The Committee receives quarterly updates from the Company’s management responsible for
ESG and sustainability matters and provides recommendations on ESG and sustainability
strategy to the Board.
Our Risk Committee oversees the risks and opportunities related to the Company’s climate
change exposure and initiatives and receives biannual reports relating to climate change as part
of its standing agenda. The Risk Committee also reviews and approves the Company’s Enterprise
Risk Management (“ERM”) framework, including policies and limits to address risks – such as
climate risk – facing the Company.
Executive Committee and Senior Leadership Oversight
Our senior leaders are responsible for ensuring that our climate and other ESG and sustainability
activities – including management of climate-related risks and opportunities – are consistent
with our culture, values and business objectives.
• Our General Counsel serves as the sponsor of our Corporate Citizenship program and is
responsible for oversight and implementation of the program and ESG activities. Our
General Counsel oversees the progress on our ESG priorities and reports to the
Company’s Corporate Governance, Nominating and Social Responsibility Committee, the
CEO and the Executive Committee on these initiatives.
• Our Chief Risk Officer leads our Group Risk function and is responsible for oversight and
implementation of the Group's ERM framework, including risks relating to climate
change. Our Chief Risk Officer chairs the Risk Management Committee and reports to
the Board and Risk Committee on climate risk. The Chief Risk Officer leads the Climate
Change Working Group and the Emerging Risk Working Group.
8 | AXIS Capital Holdings Limited TCFD Report 2022
• Our Chief Investment Officer is responsible for developing the Company’s investment
policies and guidelines, monitoring compliance with those guidelines, and overseeing
the Company’s investment risks, including in relation to climate change. In addition,
along with our Risk and Investments team, our Chief Investment Officer oversees
compliance with our Environmental, Social and Governance Investment Policy Statement.
• Our Chief Underwriting Officer has management responsibility for executing the Group's
global underwriting strategy in line with the enterprise portfolio goals, including
oversight of exposure management and consideration of climate risk within the portfolio.
• Our ESG Director chairs the Corporate Citizenship Committee, which focuses on climate
as a key pillar. Responsibilities also include implementation of the Committee's activities
such as overall strategy, goal-setting and program execution.
Our senior leaders are supported by the following committees, management working
groups and teams that are actively involved in identifying and assessing climate-related
risks relating to underwriting and investments:
Corporate Citizenship Committee:
Day-to-day management of our Corporate Citizenship program is handled by our Corporate
Citizenship Committee, a cross-functional and global committee tasked with overall strategy, policies
and governance. Dedicated committee pillar leads for climate, DEI and philanthropy oversee staff
working groups, including those climate-relevant groups listed below.
Risk Management Committee:
The Executive Committee has delegated some authority to the executive level Risk Management
Committee (“RMC”), which consists of the Chief Executive Officer, Chief Financial Officer, Chief
Underwriting Officer, AXIS Re CEO, Chief Risk Officer (Chair), Chief Information Officer, Chief People
Officer, Group Chief Actuary and General Counsel. The RMC convenes quarterly and oversees the
integrity and effectiveness of the Company’s ERM framework and ensures that the firm’s risk
assumption and risk mitigation activities are consistent with that framework.
9 | AXIS Capital Holdings Limited TCFD Report 2022
Emerging Risk Working Group:
The Emerging Risk Working Group is
responsible for tracking emerging risks
according to their potential impact and time
horizon and coordinating the Company’s
response to emerging risks and opportunities,
including those related to climate change. The
Emerging Risk Working Group is comprised of
senior representatives from across the business,
including our Chief Risk Officer, Chief
Investment Officer, Head of Digital, Chief
Underwriting Officer, Head of Claims, Group
Chief Actuary, General Counsel and Chief Data
& Analytics Officer.
Natural Catastrophe Committee:
The Natural Catastrophe Committee oversees
the firm’s natural catastrophe risk management
framework, including the validation of modeling
and accumulation practices. The Natural
Catastrophe Committee consists of the Head of
Natural Catastrophe Exposure Management,
Head of EMCE, Chief Underwriting Officer and
Group Chief Actuary.
Climate Change Working Group:
The Climate Change Working Group, chaired by our Chief Risk Officer, oversees and coordinates
activities and initiatives in relation to climate change.
The group is comprised of senior representatives from across the business, including our Chief Risk
Officer, Head of EMCE, and representatives from Finance, Risk, Underwriting, Legal and
Communications. Among other things, this group:
• Assesses climate-related risks and opportunities, including consideration of emerging risks
associated with climate change;
• Promotes knowledge-sharing across the business on the topic of climate change;
• Leads research on climate change and provides information to senior decision makers
involved with catastrophe risk management and underwriting decisions; and
• Informs the Emerging Risk Working Group of climate-related risks and considerations.
Investment and Finance Committee:
The Investment and Finance Committee, chaired by our Chief Investment Officer, receives quarterly
reports on:
• the investment grade fixed income portfolio's aggregate ESG rating; and
• compliance with ESG restrictions.
In addition, the Investment and Finance Committee receives an annual report on relevant asset
manager scorecards with ESG specific scores.
Exposure Management Team:
The Exposure Management Team, including the Exposure Management Centre of Excellence ("EMCE")
advises on the exposure to risk, including climate risk.
10 | AXIS Capital Holdings Limited TCFD Report 2022
Enterprise Functional Teams
At AXIS, the following teams work across the enterprise to execute on our climate strategy and
report progress to senior management through the: (i) Corporate Citizenship Committee, (ii)
Risk Management Committee and (iii) Investment and Finance Committee.
Financial Reporting Team
The Financial Reporting team assists with reviewing the Company's GHG emissions calculations.
Vendor Management Team
The Vendor Management team assists with implementing the Company’s sustainable supply
chain pledge.
Facilities Team
The Facilities team assists with initiatives to achieve AXIS' Scope 1 and 2 GHG reduction goals.
Investments Team
Along with our Risk Management team, the Investments team is responsible for ensuring
compliance with our ESG Investment Policy Statement, as well as compliance with the
investment elements of the Company’s Fossil Fuel Policy.
Underwriting Team
The Underwriting team is responsible for pursuing new climate opportunities and adhering to
ESG underwriting policies. The team’s input is also taken into account is several of our
management committees and working groups.
Legal and Compliance
The Legal and Compliance team is responsible for the Company’s ESG reporting and policies, as
well as ensuring compliance with our policies and applicable regulatory requirements.
Marketing and Communications
The Marketing and Communications team ensures clear internal and external communication of
climate-focused policies and programs.
Risk Management Team
The Risk Management team is responsible for our Group risk function, oversight and
implementation of the Group’s ERM framework and climate-focused initiatives.
11 | AXIS Capital Holdings Limited TCFD Report 2022
Climate Strategy
Our Approach
Our climate approach addresses climate-related risks, exposure management, underwriting,
advancing the energy transition, climate and investment, the sustainability of our business
operations and our advocacy on climate-related matters. We are proud of the progress we have
made thus far in our climate initiatives, and we are committed to taking further actions.
Climate-Related Risks
As an insurance provider, AXIS has a long history of considering environmental risks at both the
policy and firm levels. We take short-, medium- and long-term horizons into account when
assessing environmental risks at both the policy (underwriting) and firm level (management of
firm-level risks and capital adequacy). Our strategy for limiting risk is discussed in this report
under “Risk Management.”
Risk Category
Risk Type
Definition
Time Horizon
Potential Impact
Physical risks
Acute
Increased frequency and severity of natural
catastrophe and weather-related events such
as heatwaves, wildfires, extreme rainfall,
flooding and droughts
Short-term: Material
impacts already seen
High
Chronic
Long term shifts in weather patterns, including
increasing global average temperatures,
reduced rainfall, shifting seasons and rising sea
levels
Long-term: First
material impacts
expected within 5-10
years
High
Transition risks
Policy and
Regulatory
Increased regulatory requirements, including
reporting obligations, carbon pricing, and
mandates on and regulation of existing
products
Medium-term: First
material impacts
expected 1-5 years
High
Technology
Technological developments may disrupt the
characteristics of insured assets and require
new risk assessments which do not have a pre-
existing record of damage and loss
Medium-term: First
material impacts
expected 1-5 years
High
Market
Shifts in supply and demand from changes in
market dynamics related to climate change
could affect the valuation of AXIS’ assets and
liabilities. Shifts in customer preferences due to
climate change
Medium-term: First
material impacts
expected 1-5 years
High
Reputational
Company reputation may be influenced by our
climate change response and service and
investment in carbon intensive sectors
Medium-term: First
material impacts
expected 1-5 years
High
12 | AXIS Capital Holdings Limited TCFD Report 2022
Liability risks
Claims
Increased insurance claims liability due to the
effects of climate change, including increased
D&O claims liability resulting from
greenwashing litigation
Medium-term: First
material impacts
expected 1-5 years
Medium
Litigation
Increased litigation relating to GHG emissions
or climate-related disclosure
Medium-term: First
material impacts
expected 1-5 years
Medium
Physical risks
Physical risks describe extreme weather-related events (acute) and longer-term shifts in climate
patterns (chronic) and emanate primarily from underwriting of property insurance and
reinsurance. Climate change may expose us to an increased frequency and/or severity of the
weather-related losses which we might not have sufficiently captured in our catastrophe models,
resulting in inadequate pricing, excess risk aggregation and capital destruction. Over the longer
term, climate change may have an impact on the economic viability of certain lines of business if
suitable adjustments in price and coverage cannot be achieved.
Physical risks may affect our investment portfolio as a result of direct damage to assets or due
to valuation changes from shifts in supply and demand for certain products and services.
Physical risks are most likely to affect equity investments.
Transition risks
Transition risks to a lower-carbon economy include changes in technology, governments and
regulators putting in place measures to encourage and support efforts to prevent climate
change, and society as a whole adapting to a lower-carbon economy, and losses in our
investment profile as a result of the impacts of climate change. Our principal transition risks are
discussed below.
AXIS could be exposed to transition risks if it fails to manage increased demand for low-carbon
products and services. Over the short- and medium-term, a change in customer needs may
result from repricing of carbon-intensive assets, increased interest in the low-carbon industry
due to reputational concerns or new regulatory constraints. A failure to appropriately respond to
increased demand may adversely affect our business. AXIS must also manage risk that certain
products may cease to be viable as a result of society’s transition to a lower-carbon economy.
New laws and regulations may limit our ability to engage in capital or liability management,
require us to raise additional capital, and impose extensive requirements and additional costs.
Changes in regulatory requirements could include net-zero policies, carbon taxes, or laws
prohibiting insurers from reducing exposures or withdrawing from catastrophe-prone areas.
The primary objectives of our investment strategy are income, preservation of capital, liquidity
management and growth of surplus. We may be exposed to losses in the value of our
13 | AXIS Capital Holdings Limited TCFD Report 2022
investments arising from the impacts of climate change on the companies and securities in
which we invest, including impacts resulting from transition risks. Transition risks are most likely
to affect equity investments.
Liability risks
Liability risks relate to losses or damages suffered by our insureds from physical or transition
risks, such as losses stemming from climate-related litigation in liability lines. These risks could
arise from companies not fully considering or responding to the impacts of climate change, or
not appropriately disclosing current and future risks. In addition, new regulatory developments,
increased litigation activity and subsequent liability issues associated with climate change or
greenhouse gas emissions may lead to losses under environmental liability, product liability and
directors and officers or professional liability, particularly where the emitter is deemed to have
misled investors. In addition, there is a link between liability risk and transition risk (described
above) as the failure of companies to shift towards a low-carbon future and mitigate the impacts
of climate change may lead to losses incurred by insureds.
In recent years, our industry has experienced an overall increase in various climate-related
litigation claims. These include a perceived contribution to climate change, or for insufficient
disclosure around material financial risks. As the value of loss and damage arising from climate
change grows, it is plausible that litigation risk of this kind may increase. For example, there
have been shareholder securities suits brought against companies and their directors and
officers, as well as derivative actions brought against directors, for various allegations of failing
to disclose and/or manage climate change risks. Although to our knowledge litigation to date
has not resulted in any material amounts of loss, this may change in the future, and an increase
in such litigation could lead to higher defense costs. Litigation seeking to compel companies to
remedy their perceived impact on climate change may, if successful, also lead to an increase in
claims. Based on our monitoring, while the overall volume of litigation activity has increased,
past litigation seems to have largely been unsuccessful on numerous grounds.
Exposure Management
We review our portfolio to ensure our climate exposure is within appetite and adjust our
business strategy based on our assessments. In 2022, AXIS announced its exit from its
catastrophe and property reinsurance business as part of an overall approach to reduce the
Company's exposure to volatile catastrophe risk. The strategic exit was driven by factors such as
the significant and increasing effects of climate change and the challenges faced by the
catastrophe reinsurance market.
For information on how we use scenario testing to mitigate climate-related risk, refer to “Risk
Management – Identifying and Assessing Climate-Related Risks – Physical risks – Scenario
analysis” and “Risk Management – Approach to Managing Climate-Related Risks Within Overall
14 | AXIS Capital Holdings Limited TCFD Report 2022
Risk Management Framework – How we manage climate-related risk – Stress and scenario
testing” in this report.
Underwriting
We consider climate in how we underwrite, what we underwrite, and incentives we provide.
Throughout, we strive to engage with brokers and customers on climate issues and actively seek
to identify and act on climate-related opportunities. To inform next steps in our climate
underwriting strategy, in 2022 we completed a focused review of our global portfolio’s climate
risks and opportunities across product lines. Other key initiatives in support of the energy
transition relate to (i) climate-focused products, (ii) customer incentivizes and (iii) underwriting
restrictions.
Products
We offer a range of climate-focused products. AXIS is committed to providing insurance
products and ancillary risk control services that support the market transition to a low-carbon
economy. Climate-related regulations and changing consumer interests may lead to increased
demand for our renewable energy products, environmental insurance, design professional
liability insurance, credit insurance and reinsurance solutions. Descriptions of these potential
areas for growth are below.
Renewable energy products
As a leading carrier in renewable energy insurance with
extensive experience and an in-depth understanding of the
risks faced by the industry, we believe AXIS is well
positioned to provide value and service to this growing
market. We provide specialized property and casualty
coverage for every stage of wind, solar and energy storage
projects, from development through operation, on risks
ranging from stand-alone projects to utility-scale portfolios.
Our gross premiums written for renewable energy have
grown each year for the last five years, making us a leader
in the renewable energy space. As U.S. domestic and
international renewable energy industries continue to
expand, our renewable energy practice analyzes industry
trends, market data and loss trends to design and develop
insurance products tailored to the specific needs of
renewable energy businesses. In connection with its
renewable energy products, AXIS may provide its customers with a risk mitigation assessment
based on a survey of the insured risk. These risk assessments are intended to educate customers
on their renewable energy projects’ risk landscape and how to reduce their projects’ technical,
Spotlight:
AXIS Explores
As part of our thought leadership,
the AXIS Renewable Energy team
wrote several reports exploring
failures, defects and damages
surrounding renewable energy
topics. In 2022 topics include
ground mount solar, onshore
wind and battery energy storage
systems.
Learn more about AXIS Renewable
Energy thought leadership here.
15 | AXIS Capital Holdings Limited TCFD Report 2022
environmental and operational risk exposure. Recommendations may include improvements to
the customer’s maintenance practices or investments in additional safety features.
Environmental insurance
Our environmental insurance helps property owners, industrial and commercial facility operators
and specialty and general contractors address the uncertainties that come with environmental
projects, including solar. Our environmental insurance offers innovative coverage against
environmental risk exposures and provides versatile solutions to safeguard against pollution-
and hazardous waste-related risks. In addition, our environmental insurance policies may cover
the clean-up of hazardous waste and the restoration of sites that present a hazard to health and
the environment. Insurance solutions include contractor pollution liability, pollution legal
liability, remediation management, specialty package policy and special package policy for
manufacturers.
Clean energy
Our underwriting teams regularly collaborate and partner to provide insurance coverage to
support the development of clean energy assets. Recently AXIS’ Construction and Upstream
Energy teams partnered to develop a London market insurance line slip that will support the
construction and operation of:
• Onshore Erection All Risks (EAR) for carbon capture and storage facilities;
• Onshore operational coverage for carbon capture and storage facilities, including
transmission and distribution; and
• Carbon capture and storage within onshore wells.
Design professional liability insurance
Our design professional liability insurance protects architectural and engineering professionals
from potential liability relating to contractual requirements, including contractual requirements
relating to sustainability. In addition, we offer risk management services to reduce the likelihood
of claims.
Credit risk insurance
We provide credit risk insurance on project finance loans used to build renewable projects which
are critical to the global renewable buildout. These cover wind, solar, geothermal, carbon
capture and energy storage renewable projects. This includes AXIS’s recent provision of credit
insurance coverage to the African Development Bank to help accelerate the mobilization of
private capital and investment in renewable and clean energy projects in Africa. We also provide
surety bonds covering the installation of electric vehicle charging stations.
Reinsurance solutions
On the reinsurance side, AXIS extends reinsurance coverage to cedants that target customers
that can demonstrate a credible pathway to low carbon production. AXIS provides reinsurance
coverage to a consortium of clients whose intended customers must be able to evidence the
16 | AXIS Capital Holdings Limited TCFD Report 2022
ability and desire to deploy capital to either: improve the carbon efficiency of their current
operations, reduce emissions through operational improvements, invest in new technology to
lower carbon emissions, or compensate for hard to abate emissions by offsetting. The
consortium uses a third-party emissions monitoring tool in its underwriting procedures to
measure and track the above, which enables them to evidence their clients’ improved carbon
efficiency over time using quantifiable metrics. The insured’s ESG-favorable business model was
a factor in AXIS' underwriting decision and continues to be a consideration in our reinsurance
business.
We also provide reinsurance solutions for the increasingly complex world of crop perils. Crop
insurance allows farmers to collect insurance when crop yields or market prices are lower than
expected, an increasingly common occurrence due to rising global temperatures, weather
volatility and more frequent and severe extreme weather events resulting from climate change.
In doing so, crop insurance helps protect farmers from the effects of climate change and
consumers from a shortage of food supply and extreme prices.
Incentivizing sustainable behavior through customer initiatives
In addition, AXIS has identified opportunities to incentivize customers to engage in
environmentally friendly behaviors and to make smarter decisions regarding environmental
responsibility. Some of these incentives are discussed below.
Property insurance climate-related discounts
On the property side, we use models that are sensitive to building characteristics. These models
result in discounted pricing for building codes that are more resilient to climate-related risks.
Chemical, petrochemical, oil and gas and energy customers
Our customers include specialty businesses in the chemical, petrochemical, oil and gas and
energy industries. These types of insureds typically experience significant exposures to
environmental hazards and accidental chemical and petrochemical spills and releases. Subject to
our Fossil Fuel Policy (available on our website at www.axiscapital.com), we provide cover for
third party bodily injury and property damage arising from pollution events caused by risks and
operators within these industries. We also provide environmental insurance and specialty cover
related to pollution and hazardous waste, as described in "Environmental insurance" above, and
a limited pollution coverage on an excess basis that supplements excess coverage provided for
general liability, automobile liability and employers liability. Our underwriting and pricing
practices are designed to benefit and reward those insureds who are best able to manage their
environmental and pollution exposures through sound risk management, safety practices, loss
prevention and ultimately the prevention of spills and releases of pollutants.
Risk control service
Alongside our underwriting operations, AXIS utilizes risk control services that carefully identify
exposures in our property and casualty business through loss-control inspections and reviews.
Identifying the hazards and providing solutions to mitigate or eliminate such hazards ultimately
17 | AXIS Capital Holdings Limited TCFD Report 2022
makes the policyholder’s business safer. AXIS periodically meets with policyholders and provides
detailed guidance to help policyholders identify potential areas of loss before an event or
circumstance giving rise to a loss can materialize. Examples include the following:
• Property business: In our property line of business, losses result from the release of
contaminates from fire (smoke and heat), water damage, destruction of property and
other environmental exposures. Our risk control service works with policyholders in this
area to make recommendations that, if implemented, may greatly limit the likelihood of
devastating damage to property and the surrounding environment.
• Green endorsements: AXIS offers green endorsements or add-on components to
commercial property policies. These green endorsements may include coverage for
“green” construction, materials and equipment and may potentially cover the higher cost
of environmentally certified materials, equipment, design and engineering.
• Casualty business: On the casualty side of the business, inspections identify injury
hazards or exposures in the commercial space, and we recommend solutions and
improvements aimed at eliminating the potential for injury. These efforts provide
employees with safer workplaces and in some cases may improve the public
environment.
• Premium credits: AXIS may offer premium credits for behaviors such as management
cooperation in matters of safeguarding and proper handling of covered property and
particular care being given to insured premises, to insureds with “green” buildings, or to
those conducting energy efficiency upgrades on their current buildings. We offer
premium credits for properties for which state-approved fortification improvements have
been made and for qualifying structures built, rebuilt or retrofitted to better resist
hurricanes and other catastrophic windstorm events. Premium credits are also given to
customers that maintain smart devices that monitor temperature, fire and water leakage.
Additionally, AXIS offers premium credits to landscape industry customers in almost all
states who have obtained nationally recognized safety designations.
Advancing the Energy Transition
We are committed to supporting the energy transition through our underwriting and investment
policies and guidelines. As thermal coal and oil sands are among the most carbon-intensive
fossil fuels, AXIS developed and implemented a Fossil Fuel Policy limiting our exposure to these
industries. In particular, the policy limits our provision of (re)insurance to new thermal coal
plants or oil sands infrastructure and, subject to limited exceptions (including an exception for
companies with credible transition plans in place), our provision of (re)insurance to, and
investment in, the companies that build, own or operate such enterprises. Through the policy,
we also aim to encourage environmentally responsible business practices among our current
and prospective insureds by, among other things, encouraging them to commit to mid- to long-
18 | AXIS Capital Holdings Limited TCFD Report 2022
term transition plans away from thermal coal or oil sands business. This is part of AXIS’ broader
strategy to invest in growth areas such as renewable energy insurance.
In addition, through our Fossil Fuel Policy, AXIS has committed to fully phasing out thermal coal
from its insurance and facultative reinsurance portfolios no later than 2030 in OECD countries
and 2040 globally. Additionally, by the end of 2025, AXIS has committed to phase out any
existing investments in companies in the thermal coal or oil sands industries that exceed its
policy thresholds.
Climate and Investment
In addition to AXIS’ Fossil Fuel Policy discussed above, which restricts AXIS’ investments in
certain industries, in 2022 AXIS adopted an Environmental, Social and Governance Investment
Policy Statement (the “ESG Investment Policy”) to incorporate ESG concerns into investment
decisions to better manage risk and achieve long-term profits. The ESG Investment Policy sets
forth the principles governing AXIS’ responsible investment strategy, asset manager selection
and oversight, stewardship and engagement as well as ESG investment governance and
responsibilities.
With respect to asset management selection and oversight, the ESG Investment Policy details
how AXIS evaluates its investment managers and its ESG performance through an annual
scorecard process. Each year, AXIS asks relevant investment managers to complete a due
diligence questionnaire which covers, among other things, ESG policy updates, ESG resources,
ESG investment practices, ESG affiliations and ESG reporting. Based on their responses to the
due diligence questionnaire, managers receive a summary ESG score which is factored into its
broader manager assessment score. AXIS monitors the annual scores of its investment managers
and takes the ESG scores into account when considering whether to redeem or sell all or a
portion of the investments managed by a particular investment manager.
AXIS is also focused on providing capital in order to promote a sustainable future. More
specifically, AXIS has committed $45 million to investments primarily focused on clean energy,
infrastructure, and energy transition.
Sustainable Operations
In addition to the above climate risk management, underwriting and investment initiatives, AXIS
acknowledges that doing our part means being environmentally friendly at the office and within
our teams. Key priorities in the reporting year included:
19 | AXIS Capital Holdings Limited TCFD Report 2022
• GHG measurement and goal-setting: We
continued to actively track Scope 1, Scope 2 and
select Scope 3 GHG emissions in line with the
Greenhouse Gas Protocol Corporate Accounting
and Reporting Standard. In 2022, we published our
Scope 1, Scope 2 and partial Scope 3 greenhouse
gas emissions for years 2020 and 2021 and we
announced science-based aligned greenhouse gas
reduction targets in line with the goals of the Paris
Agreement. We are using the data to identify
opportunities to mitigate our carbon footprint and
meet our stated goals. See GHG data, including
our emissions for 2022, in the “Metrics and
Targets” section of this report.
• Office space: We continued to decrease global
office square footage overall relative to 2019; global square footage in December 2022
was approximately 38% less than our square footage at the same time in 2019. We
optimized existing square footage by continuing to transition to open office
configurations in some locations.
• Supply chain: AXIS signed the Global Supply Chain Pledge launched by the Sustainable
Markets Initiative Insurance Task Force. The Sustainable Markets Initiative Insurance Task
Force was convened by HRH the former Prince of Wales and is chaired by Lloyd’s of
London as part of the Sustainable Markets Initiative. Through the Global Supply Chain
Pledge, AXIS has committed to take action to encourage and support supply chain
partners to make the green transition. As a first step to address this pledge, AXIS
launched a working group tasked with developing and implementing a global
sustainable supply chain approach for the Company.
• Employee benefits: To incentivize employees to reduce emissions, AXIS launched electric
vehicle benefits for AXIS staff in the United Kingdom through a government-backed
salary sacrifice scheme. As part of the program, AXIS provides colleagues in the United
Kingdom with access to discounted lease options for electric and hybrid vehicles. In
addition, AXIS allows these colleagues to purchase at-home charging equipment using
either a flexible benefits allowance or through a pre-tax payroll deduction.
Partnership and Engagement
AXIS is a signatory or member, as applicable, of the following frameworks and organizations. We
leverage the work of these organizations and initiatives to support our climate risk governance:
Spotlight:
SolarBuddy
As part of our 2022 Global Giving Rally,
a few AXIS offices participated in WWF’s
SolarBuddy volunteer event. Colleagues
came together to build solar powered
lights for children in developing
countries. From our events, colleagues
were able to assemble 580 lights for
kids in the Dominican Republic, Africa,
and Cambodia.
Learn more about the SolarBuddy
project here.
20 | AXIS Capital Holdings Limited TCFD Report 2022
• The Principles for Sustainable Insurance, a global sustainability framework and initiative
of the U.N. Environment Programme Finance Initiative.
• The U.N. Global Compact, a voluntary initiative based on CEO commitments to
implement universal sustainability principles and to take steps to support U.N. goals.
We are also participants in a variety of climate-focused
organizations:
• Member of the IDF, a partnership among the
United Nations, the World Bank and members of
the insurance industry
• Member of the Sustainable Products and
Services Workstream of the Sustainable Markets
Initiative Insurance Task Force, convened by
HRH the former Prince of Wales and chaired by
Lloyd’s, and a signatory to the Global Supply
Chain Pledge
• Member of The Geneva Association, the
international think tank of the insurance industry
In addition, our partnership with the University of Illinois’ Office of Risk Management and
Insurance Research continued in 2022. The partnership is part of AXIS’ longstanding
commitment to promote research and education in areas relevant to the insurance industry and
provide a platform to address areas like climate risk. In addition, in 2022 AXIS participated in
the National African American Insurance Association's annual kickoff event on insurers' role in
building a sustainable future as a thought leadership opportunities on sustainability.
Impact of Climate-Related Risks and Opportunities on Businesses,
Strategy and Financial Planning
Since its inception, AXIS has been offering protection against weather-related risks such as
hurricanes, storms, wildfires and floods, helping businesses and individuals proactively manage
their exposure to such risks, and, when the need arises, recover from their aftermath. We
therefore have a long history of considering physical environmental risks.
AXIS has taken measures to incorporate climate-related factors across our business and to
consider climate within the strategic planning process. Our approach considers climate in
underwriting and pricing to manage climate-related risks and uses product offerings to respond
Spotlight:
Hosted Future of Insurance Webinar
Series
AXIS was proud to partner with the
University of Illinois' Office of Risk
Management and Insurance Research to
host the Future of Insurance webinar
series in 2022, where experts discussed the
latest trends in climate change and the
challenges and opportunities it presents
for the (re)insurance industry.
21 | AXIS Capital Holdings Limited TCFD Report 2022
to climate-related opportunities. Climate considerations are also incorporated into our
investment process. Our climate strategy also includes advocacy on climate-related matters
within the industry and understanding the environmental impact of our own business
operations. For information on climate-related risks and opportunities, refer to “Climate Strategy
– Climate-Related Risks.”
For information on how we use scenario testing to mitigate climate-related risk, refer to “Risk
Management – Identifying and Assessing Climate-Related Risks – Physical risks – Scenario
analysis” and “Risk Management – Approach to Managing Climate-Related Risks Within Overall
Risk Management Framework – How we manage climate-related risk – Stress and scenario
testing” in this report.
22 | AXIS Capital Holdings Limited TCFD Report 2022
Risk Management
Identifying and Assessing Climate-Related Risks
As part of our consideration of environmental risks, we specifically seek to identify and assess
climate-related risks relating to our portfolios by geography and line of business. These risks
include physical, transition, and liability risks. Aspects of our process for identifying and
assessing these risks are discussed below. We are continuously working to enhance our climate
risk assessment framework. In addition, in 2022 we completed a transition risk analysis of our
global insurance and reinsurance portfolio, including exposures to certain carbon-intensive
sectors. We intend to use the results to develop new products, identify increased coverage
demand or extend coverage within existing products. In addition, we are using the results to
potentially reduce exposures in carbon-intensive areas.
Physical risks
Catastrophe models
Catastrophe modeling is critical to our climate risk strategy and is the primary tool that we use
to assess the potential financial impact of catastrophe risk. Catastrophe models help assess our
exposure to specific catastrophe events in peril regions, and we use our catastrophe model
results, together with judgment and our estimate of non-modeled perils, to calculate our net
Probable Maximum Loss (“PML”) for defined regional zones, such as the U.S. Southeast, Gulf of
Mexico and California.
Our PML estimates are based on assumptions that are inherently subject to significant
uncertainties and contingencies. These uncertainties and contingencies can affect actual losses
and could cause actual losses to differ materially from PML estimates. We aim to reduce the
potential for model error in a number of ways, the most important of which is by ensuring that
management’s judgment supplements the model outputs. Models are continuously validated at
the line of business level and at a group level, including through the EMCE. These validation
procedures include sensitivity testing to understand the models’ key variables and, where
possible, back testing the model outputs to actual results.
For examples of our PML calculations, please refer to “Metrics and Targets.” Our validation
procedures also take climate change into account and in some cases we adjust the model to
represent current climate conditions. Catastrophe models results and PMLs are then used to
mitigate and manage physical risks through portfolio management, product pricing, capital
allocation, estimation of losses, strategic planning and reinsurance purchasing decisions.
23 | AXIS Capital Holdings Limited TCFD Report 2022
Scenario analysis
We perform scenario analysis to understand how climate-related risks and opportunities may
evolve over time and to ensure compliance with solvency and liquidity requirements in stressed
conditions.
Through our EMCE, AXIS has devised a set of 2°C global warming climate change scenarios to
inform our business strategy. Scenarios have been devised for U.S. Hurricane, European
Windstorm, U.S Wildfire and Japan Typhoon. These climate change scenarios are based on
relevant reports by the Intergovernmental Panel on Climate Change (“IPCC”), which sets out
potential future climate scenarios and other scientific literature, and are compared against
scenarios developed in collaboration with a third-party firm to facilitate a deeper understanding
of risk exposure. The scenarios have been reflected in our catastrophe modeling by modifying
the event sets. The results illustrate that, across all return periods, climate change is modelled to
increase losses at varying degrees, depending on the return period and peril region.
In addition, in 2022 we conducted enhanced climate change stress testing to understand how
climate-related risks and opportunities may evolve over time and to assess the impact of long-
term climate trends on the Company’s current portfolio. As part of our 2022 climate change
stress and scenario testing, we voluntarily conducted scenario testing based off the Prudential
Regulatory Authority (PRA) Climate Biennial Exploratory Scenario and participated in the
International Monetary Fund Climate Stress Test.
The EMCE team also reviews our modeling approach and identifies and conducts reviews of peril
regions most likely to be affected by climate change (such as regions subject to wildfires). If a
peril region is affected by climate trends, we check if the model has been calibrated to a shorter
period and if the model losses are in line with our recent loss experience. If this is not the case,
we may adjust our view of risk by applying additional loadings or by adjusting return periods of
benchmarking events to reflect an increased frequency of catastrophe events. The EMCE
summarized the scientific findings in an interactive Climate Change Atlas that serves to inform
other stakeholders within the company (e.g., underwriters, risk managers, actuaries) about the
potential impact of climate change on a certain peril region.
Transition risks
We monitor and assess the potential future impacts that political and regulatory developments
may have on our business. In particular, our Compliance team performs ongoing monitoring
and assessment of any planned or actual changes in legislation pertaining to the insurance
sector, including those related to climate change, and engages with impacted business areas to
ensure compliance. The regulatory focus on how businesses in the financial services industry,
including insurance companies, manage climate risk in both their business operations and
investment portfolios is increasing.
We monitor changes in technology and societal adaptation to a lower-carbon economy that
may change demand for particular products and present new product opportunities. AXIS also
24 | AXIS Capital Holdings Limited TCFD Report 2022
closely monitors scientific literature on climate change, including reports by the IPCC, to identify
transition risks to our business.
Liability risks
Liability risks relate to losses or damages suffered by our insureds from physical or transition
risks, such as losses stemming from climate-related litigation in liability lines.
Although our liability exposure is considered limited at present, as the outlook for climate
change litigation is highly uncertain, we monitor litigation trends to assess the potential impact
of any developments on our businesses and overall risk mitigation strategies. In particular, we
track ongoing litigation in the United States that seeks to compel companies to remedy their
perceived contribution to climate change (i.e., mitigation costs, third-party property damage,
etc.).
Approach to Managing Climate-Related Risks Within Overall Risk
Management Framework
Process for risk management
Risk Limit Monitoring
Risk Quantification
AXIS ERM
Process
Identity
Assess
ManageMonitor
Report
Risk Management Cycle
Risk Assessment
Risk Event Reporting
Reverse Stress Testing
Stress and Scenario Testing
ORSA
Emerging Risk Process
Risk Management Strategy
Risk Appetite and Limit Framework
Risk Management Policy
Risk Reporting
Risk Governance
Risk Culture
25 | AXIS Capital Holdings Limited TCFD Report 2022
Our ERM framework is evolving and responds to changes in the Company’s internal and external
environment to enhance value creation and remain relevant to the business. The
implementation and oversight of the framework is the responsibility of the Risk Management
team, which is led by our Chief Risk Officer.
The above diagram shows all the components of the Company’s ERM framework.
Climate-related risks and opportunities are overseen and managed as part of our ERM
framework. For example, specific climate risk appetites are devised as part of our risk appetite
framework, climate risks feature in our risk policies, we perform risk assessments and deep dives
of climate risks and use stress and scenario testing to assess the impact of certain events on our
portfolio.
How we manage climate-related risk
Firm-level
Our ERM framework manages environmental risks at the firm level over short-, medium- and
long-term horizons and provides the Chief Risk Officer and Executive Committee with a
consolidated view of AXIS’ key risks. Our ERM approach includes a distinct climate change risk
management framework and a framework to create a holistic approach for managing climate-
related risks. Environmental risks identified by the ERM framework are used to determine
business lines and products, capital needs and reinsurance decisions.
Catastrophe models, as described above, assist in managing our aggregate exposure to natural
catastrophes and climate risk. These models assist us in monitoring our portfolio’s exposure to
risks for specific catastrophic events in peril regions.
Our catastrophe models also are taken into account in setting our long-term financial strategies
and business objectives, including new product development. For example, AXIS is investing in
growth areas such as renewable energy insurance, an area in which we have maintained our
position as a leading global insurer, particularly for wind, solar and battery storage facilities.
As mentioned previously in this report, AXIS may adjust or reposition its portfolio based on its
assessments of climate-related risk. In 2022, AXIS announced its exit from its catastrophe and
property reinsurance business as part of an overall approach to reduce the Company's exposure
to volatile catastrophe risk. The strategic exit was driven in part by the significant and increasing
effects of climate change and the challenges faced by the catastrophe reinsurance market.
Policy- and portfolio-level
At the policy level, environmental risks, along with other relevant perils, are taken into account in
pricing, coverage limitations, duration and other policy terms. Our catastrophe models inform
our underwriting decisions, pricing and policy terms and reinsurance purchasing decisions.
The underwriting process, along with the environmental risk assessment, is specific to the risks
to be insured. Our underwriting process factors in natural catastrophe exposure, along with any
26 | AXIS Capital Holdings Limited TCFD Report 2022
relevant risks. If the drivers of a risk change, upon renewal we may update pricing, add contract
endorsements or include exclusions to reflect the updated risk. As the majority of our insurance
contracts are renewable annually, we are able to quickly respond to any such risk change. Return
on capital is a key metric incorporated into our underwriting decisions. Policies with more risk
require a higher return on capital, along with higher premium levels.
Reinsurance
AXIS buys reinsurance and retrocessional cover (insurance against losses experienced within our
insurance or reinsurance portfolio) to mitigate the financial impact of any covered weather and
catastrophe events. We cede catastrophe risk generally on a treaty basis (i.e., covering a
portfolio of risks), buying both proportional and non-proportional coverages.
Under proportional treaties, AXIS cedes an agreed percentage of related premiums and losses
and loss expenses on the policies underwritten. This generally includes both traditional quota
shares with rated carriers and third-party capital quota shares that are capped at an upfront
collateral amount. Under non-proportional excess of loss treaties, AXIS is covered for losses that
exceed a specified threshold. In addition, AXIS periodically uses catastrophe bonds to protect
against certain weather-related losses in Europe and North America and enters into swap deals
with third parties to diversify AXIS’ catastrophe risk profile.
AXIS has a centralized risk funding department, which coordinates external treaty reinsurance
purchasing (including retrocession) across the firm, and a separate AXIS Insurance-Linked
Securities (“ILS”) team, which coordinates the sourcing and structuring of third-party capital and
ILS vehicles to support AXIS underwriting. Risk funding and AXIS ILS are overseen by our
Reinsurance Purchasing Group (“RPG”). The RPG, which includes, among others, our Chief
Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief Underwriting Officer and
representatives from the business leadership team, approves each large catastrophe treaty
placement, and aims to ensure that our risk tolerance and appetite and counterparty credit
metrics are met, and that appropriate diversification exists within our approved counterparty
panels. From time to time we make changes to our catastrophe reinsurance coverage as
appropriate and in line with our risk appetite and reinsurance purchasing strategy.
Investment process
AXIS ensures that our investment portfolio, which provides us with sufficient liquidity to meet
our claims, is diversified by end-market, issuer, asset class, and type and duration of security.
Our Investments team oversees asset allocation decisions and provides a consistent approach to
building our investment portfolio and selecting our external asset managers. While our portfolio
is generally short-dated (our fixed income securities had an average duration of three years as
of December 31, 2022), we expect that the impact of climate change will be an increased factor
in our investment decision-making over time, particularly with respect to longer-term asset
classes. For additional information on how we consider ESG in our investment decisions, please
refer to “Climate Strategy – Climate and Investment.”
27 | AXIS Capital Holdings Limited TCFD Report 2022
In addition, as noted above, AXIS has integrated ESG considerations into its due diligence
process to evaluate investment managers. For information on our investment process and the
integration of ESG considerations, please refer to “Climate Strategy – Climate and Investment.”
Stress and scenario testing
An important component of our ERM framework is our
Own Risk and Solvency Assessment (“ORSA”) process,
which assesses our ability to meet solvency and liquidity
requirements in stressed conditions, including climate
change scenarios. The purpose of this process is to support
short-term decision-making and longer-term strategic
management and ensure that AXIS has sufficient capital in
line with the Company’s risk appetite and solvency targets.
A stress test aims to assess the impact of single events by
evaluating a number of statistically defined possibilities.
Stress and scenario tests are complemented by reverse
stress testing, which is designed to help us understand
what could cause the business model to become unviable
in the short- to mid-term.
The selected tests are reviewed and approved annually by
the Risk Committee. The Risk function coordinates the
stress and scenario testing exercise in conjunction with other key functions.
We also stress test our investment portfolios to account for various scenarios related to climate
change. We use historical and hypothetical scenarios to analyze the impact of unusual market
conditions and to ensure potential investment losses remain within our risk appetite.
Spotlight:
The Geneva Association: Climate
Change & Environment Working
Group
AXIS participates in the Climate
Change & Environment Working
Group for The Geneva Association. This
group delves into pressing climate-
related challenges and seeks to
innovate risk management solutions
and investment strategies for insurers
and other stakeholders to expedite the
transition to a more resilient, low-
carbon and nature-positive economy.
Learn more here.
28 | AXIS Capital Holdings Limited TCFD Report 2022
Metrics and Targets
AXIS is committed to accountability and transparency on ESG and climate-related matters. Since
2020, we have been proud signatories of the U.N. Global Compact and Principles for Sustainable
Insurance and we report annually on our program to those organizations. We also publish an
annual SASB Disclosure Report.
Metrics Assessing Climate-Related Risks and Opportunities
We use a variety of metrics to assess climate-related risks and opportunities in line with our
overall business strategy.
Probable maximum loss
As earlier described, we use our catastrophe models, combined with our judgment and
experience, to calculate our net Probable Maximum Loss (“PML”) for a single natural peril
catastrophe event for certain defined regional zones. We have developed PML estimates for
various natural peril catastrophe events to assess our catastrophe exposure and inform our
underwriting strategies.
The table below shows our net PML to a single natural peril catastrophe event within defined
single zones that correspond to peak industry catastrophe exposures as of January 1, 2023 and
2022. The return period refers to the frequency with which losses of a given amount or greater
are expected to occur. A zone is a geographic area in which the insurance risks are considered to
be correlated to a single catastrophic event. Estimated losses from a modeled event are grouped
into a single zone, as shown below, based on where the majority of the total estimated industry
loss is expected to occur.
Estimated Net Exposures
(millions of U.S. dollars)
January 1, 2023
January 1, 2022
Territory
Peril
50 Year
Return
Period
100 Year
Return
Period
250 Year
Return
Period
50 Year
Return
Period
100 Year
Return
Period
250 Year
Return
Period
Single zone, single event
Southeast
U.S. Hurricane
$
74
96
125
$
131
186
262
Northeast
U.S. Hurricane
11
35
72
39
115
238
Mid-Atlantic
U.S. Hurricane
26
59
99
71
193
362
Gulf of Mexico
U.S. Hurricane
67
86
121
119
164
234
Europe
Windstorm
39
57
77
90
124
165
Japan
Windstorm
39
106
146
75
144
166
29 | AXIS Capital Holdings Limited TCFD Report 2022
As indicated in the table above, our modeled single occurrence 1-in-100 year return period PML
for a Southeast hurricane, net of reinsurance, is approximately $96 million. According to our
modeling, there is a one percent chance that, on an annual basis, our losses incurred from a
Southeast hurricane event could be in excess of $96 million. Conversely, there is a 99% chance
that, on an annual basis, the loss from a Southeast hurricane will fall below $96 million.
PMLs are based on results of stochastic models that consider a wide range of possible events,
their losses and probabilities. It is important to consider that an actual event does not
necessarily resemble one of the stochastic events and the specific characteristics of an actual
event can lead to substantial differences between actual and modeled loss.
Our PML estimates are based on assumptions that are inherently subject to significant
uncertainties and contingencies. These uncertainties and contingencies can affect actual losses
and could cause actual losses to differ materially from those set forth above. In addition,
estimated net losses from peak zone catastrophes may change from period to period as a result
of several factors, which include, but are not limited to, updates to vendor catastrophe models,
changes in our internal modeling, changes in our underwriting portfolios, changes to our
reinsurance purchasing strategy and changes in foreign exchange rates.
Catastrophe losses
AXIS monitors and evaluates natural, man-made and other catastrophe losses to identify
changes in frequency and severity. Estimated pre-tax catastrophe and weather-related losses,
net of reinsurance and restatement premiums, for our insurance and reinsurance segments for
the last three years are set forth in the table below. These are loss estimates as of December 31
of each year for catastrophe events occurring in that year, including the Russia-Ukraine war and
the COVID-19 pandemic, as reported in our Investor Financial Supplement which is available on
our investor relations website at www.investor.axiscapital.com.
(in millions)
Accident Year
Segment
2022
2021
2020
Insurance
207
175
443
Reinsurance
196
268
330
Total
403
443
774
Climate scenarios
As discussed above, AXIS analyzes climate scenario tests covering various natural catastrophe
perils (U.S. Hurricane, E.U. Windstorm, U.S. Wildfire and Japan Typhoon). The outputs from
climate scenario testing are used by AXIS to understand and assess our climate risk exposure
30 | AXIS Capital Holdings Limited TCFD Report 2022
and the potential financial impact covered events would have on AXIS’ results of operations.
These climate scenarios are implemented using third-party models by modifying the event sets.
Greenhouse gas assessments
We track our Scope 1, 2 and select Scope 3 GHG emissions in line with the Greenhouse Gas
Protocol Corporate Accounting and Reporting Standard.
Our measured GHG emissions for 2022 are set forth below, as well as historical comparisons.
Previous year GHG assessments are set forth in full at www.axiscapital.com.
*2019-2021 Scope 1 numbers have been restated to remove emissions from fugitive refrigerants due to immateriality
and updated UK facility emissions. Graph updated as of Oct 9, 2023 to address tabulation error.
2022 AXIS Emissions
2022 MTCO
2
e
Scope 1 Emissions
132
Scope 2 Emissions
2033
Scope 3 Emissions*
2621
Air/Business Travel
2433
Downstream Leased Assets
188
Total 2022 GHG Emissions
4786
* Scope 3 emissions resulting from employee commuting and waste are no longer reported due to immateriality.
270
283
232
132
4043
2383
2109
2033
2019
Baseline
2020 2021 2022
AXIS GHG Emissions 2019-2022 (MTCO
2
e)
50% GHG Emissions Reduction Goal Scope 1 Emissions Scope 2 Emissions
31 | AXIS Capital Holdings Limited TCFD Report 2022
2022 Regional Breakdown
United
Kingdom
European Union
North America
(U.S., Canada,
Bermuda)
Asia Pacific
Scope 1 Emissions
23
40
69
0
Scope 2 Emissions
353
33
1633
14
Scope 3 Emissions
478
160
1926
57
Air/Business Travel
415
160
1801
57
Downstream Leased Assets
63
0
125
0
Total 2022 GHG Emissions
853
233
3628
71
Cumulative Scope 1 and 2 emissions have declined year over year since we started tracking in
2019. Significant Scope 2 emissions reductions were primarily achieved in 2020 because of
changes due to the COVID-19 pandemic. Our Scope 2 emissions continue to decrease mainly as
a result of office square footage reductions. Scope 1 emissions have remained relatively steady
for the past four years. We expect to continue to see opportunities for Scope 1 and 2 emissions
reduction through optimization of the AXIS global real estate portfolio and identification of
efficiencies in facilities management. Our Scope 3 emissions resulting from air/business travel
and downstream leased assets increased in 2022 primarily as a result of increased business
travel after COVID-19 restrictions were lifted.
Targets Addressing Climate-Related Risks and Opportunities
We are committed to the transition to a low-carbon economy. Our targets include:
• Overall goal-setting: AXIS is dedicated to reducing the environmental impact of our
operations, including our global greenhouse gas footprint. In 2022, AXIS committed to a
50% absolute reduction of its Scope 1 and 2 emissions by 2030, using a 2019 base year.
• Thermal coal exit goal: In response to the identification of the thermal coal and oil sands
industries as particularly carbon intensive and susceptible to transition risk, AXIS created
its Fossil Fuel Policy. As previously noted in this report, pursuant to this policy, AXIS
committed to fully phase out thermal coal from its insurance and facultative reinsurance
portfolios no later than 2030 in OECD countries and 2040 globally. Additionally, AXIS has
committed to phase out by the end of 2025 any existing investments in companies in the
thermal coal or oil sands industries that exceed its policy thresholds.
32 | AXIS Capital Holdings Limited TCFD Report 2022
Important Legal Information
The inclusion of information in this report should not be construed as a characterization regarding the
materiality or financial or other impact of that information. Please refer to our periodic and other filings
with the SEC, which are accessible on the SEC’s website at www.sec.gov and our website at
www.axiscapital.com, for additional information concerning AXIS Capital, including information which is
more current than that contained in this report. This report should be read in conjunction with our filings
with the SEC and the other information we publish.
Certain of the metrics and other information contained in this report are derived from information
provided by third parties. These metrics and other information include without limitation certain climate
metrics and information. Although we are not aware of any inaccuracies in the third-party provided
information, that information has not been independently verified by us. Therefore, actual results may
differ from the metrics and other information contained in this report that are derived from third-party
information. AXIS Capital has not and does not intend to independently verify third-party data contained
in this report.
Certain of the metrics and other information contained in this report, including third-party derived
information, are based on estimates and assumptions. These metrics and other information include but
are not limited to metrics and other information relating to greenhouse gas emissions. In some cases, the
methodologies underlying such estimates and the assumptions may in the future be revised. That may in
the future result in the modification of metrics and other information contained in this report. AXIS
Capital undertakes no obligation to update or revise publicly any such metrics or other information.
In addition, this report contains forward-looking statements within the meaning of section 27A of the
Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. All statements, other than
statements of historical facts included in this report, including statements regarding our estimates, beliefs,
expectations, intentions, strategies or projections are forward-looking statements. We intend these
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in
the United States federal securities laws. In some cases, these statements can be identified by the use of
forward-looking words such as “may”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”,
“predict”, “potential”, “intend” or similar expressions. These forward-looking statements are not historical
facts, and are based on current expectations, estimates and projections, and various assumptions, many of
which, by their nature, are inherently uncertain and beyond management’s control. These statements
include, among other things, statements about our product offerings, catastrophe losses, modeling, the
physical, transition and liability risks of climate change, and environmental sustainability targets and goals.
Results may differ materially from those expressed or implied by forward-looking statements. Factors that
can cause results to differ materially include those described under “Forward Looking Statements” in AXIS
Capital’s most recent Form 10-K and Form 10-Qs filed with the SEC and available on our website. AXIS
Capital undertakes no obligation to update or revise publicly any forward-looking statements, whether as
a result of new information, future events or otherwise.
