TV

[00:00:07] Paul Lucas: 
Hello everyone and welcome to the latest edition of Insurance Business TV and quite a unique one at that as we look at the launch of a brand new syndicate. It was back in December last year that Axis Capital announced that it had at that stage in principle approval from Lloyds to establish a new syndicate. It said was dedicated to providing capacity for new energy projects that have a critical role in supporting the transition to net zero and building a more resilient, economically sustainable world. Energy Transition Syndicate 2050 is meant to provide a single access point to specialist insurance solutions for projects and activities associated with replacing or displacing fossil fuels through lower carbon alternatives and supporting energy resilience during that transition phase. How does it work? And now that it is open for business, how is the market reacting? I'm delighted to welcome Elliot Lyes, active underwriter of the aforementioned Axis Energy Transition Syndicate 2050, to find out. Elliot, welcome to IBTV. 

[00:01:10] Elliot Lyes: 
Thank you ever so much, Paul. Lovely to be here. 

[00:01:13] Paul Lucas: 
So as I mentioned, Elliot, Syndicate 2050 has just opened for business. Explain to us the rationale for launching a new syndicate at Lloyds. 

[00:01:23] Elliot Lyes: 
So the Energy Transition Syndicate 2050 represents a really exciting opportunity, a new platform for access. Paul, you asked about the rationale that really sits behind this new investment, and I can touch upon that in a couple of ways. The dedicated capital that we're using specifically assists the transition. As we know, the transition is not going to happen overnight. It's going to be a multi-year journey, multi-stage journey, in order to lead us to a lower carbon future. The syndicate, but the new syndicate also gives us an ideal platform to showcase and to elevate our holistic approach to underwriting energy transition. This is across multiple lines of business where Axis has leadership capabilities. It's a real statement of intent, a new syndicate. It ensures that we can align ourselves with the direction of travel of our clients and our brokers, as well as Lloyds and the rest of the market. So to expand upon this point, if we look at Lloyd's own strategic goals, is to ensure that we are the insurance market of the energy transition. We've had incredible support from Lloyds over the last 12 months in setting up this syndicate, but it's clear that we have a shared goal. 

[00:02:37] Paul Lucas: 
Yeah, I love that statement of intent idea. That's fantastic. Clearly, this is a project you're very, very passionate about, Elliot. You are, of course, active underwriter for Syndicate 2050. So can you share a little bit about your background and some of the challenges in taking this role? 

[00:02:51] Elliot Lyes: 
Absolutely. So I've worked at Axis now for nearly seven years, and those seven years have flown by. But originally, my career started back in 1996, so nearly 30 years in the insurance industry. And I originally started as an aviation broker before changing over to the underwriting side. I started off at a traditional marine Lloyds syndicate, and that really gave me exposure to multiple lines of business before I started to specialize in the energy space. Now specializing in that energy spaces has really helped me with the role that I have now. So if we fast forward to today, the expansion of my role is both a logical and exciting opportunity for me. My background allows me to empathize and to understand the journey that my clients, our clients, are going on in terms of energy transition. You also asked me about challenges going forward. So the biggest challenge that I have, that I foresee, is trying to ensure a consistent and uniform underwriting approach. And what do I mean by that? So it's a fairly embryonic underwriting arena when it comes to energy transition at the moment. A lot of the submissions and the policies that we are starting to see are nuanced. There's lots of idiosyncratic elements in them. So for us, and certainly at 2050, sitting down and reviewing each risk on its own underwriting merits is key. And why else do we do that? We really understand that every client that we see that comes through are on their own journey. So for us, sitting down and looking at underwriting on a bespoke basis is really key to our engagement with brokers and also clients. 

[00:04:41] Paul Lucas: 
Yes, Elliot, you mentioned there about clients being at different stages. Of course, this is now out in the market. So what has been the response so far? 

[00:04:51] Elliot Lyes: 
Since the initial announcement in December, we've had an absolutely fabulous response from the insurance market, both from clients and also from brokers. We've seen some really varied underwriting submissions already. And these are not just from the energy side, they are across different industries, not just the traditional energy space. So allow me to give you a couple of examples of what we've already seen. We've seen some electronic vehicle storage and transit risks. We've seen forestry with associated carbon offsets. We've seen green steel, hydrogen and renewable projects going forwards. We've also seen geothermal activities in areas of the world that we wouldn't necessarily expect to see them in. What I'm really talking about there is geothermal activity in Europe. So this is hugely encouraging for us as a new Syndicate. 

[00:05:42] Paul Lucas: 
Clearly you see the big opportunity here for Axis. So tell us a little bit more about that. How big is the opportunity, I guess not just for Axis, but for the industry as a whole? 

[00:05:52] Elliot Lyes: 
That's a great question. It's also quite a complicated question as well. And I'm hoping you'll allow me to frame my answer in terms of investment. So we are obviously seeing unprecedented levels of investment in the market, certainly in the target to get to net zero by 2050. So allow me to put some numbers around those investments. The International Energy Agency certainly reported in 2022 that level investment in clean energy alone was [Equation]4.5 trillion per annum investment on clean energy. Now, why is there so much investment? In order to hit net zero by 2050, we need to triple the size of our renewable capacity globally. And how do we do that? If we start to look at clean energy capital investment going out once again in the 2030s, we're looking at up to four and a half percent of global domestic product being spent on energy investment. So to get to net zero, you can see that there is a huge opportunity and also challenge for Axis and for the market in general. 

[00:07:13] Paul Lucas: 
So obviously that's how the market is going to develop over time. Tell us as well how you see that syndicate developing as well. 

[00:07:20] Elliot Lyes: 
So as I've already touched upon, the initial interest from the market has been really strong. And that's something we really expect to continue. Clearly, it's very early days for us. So building out the syndicate in terms of both size and also scope as well is something we're looking forward to in the future. But what do I mean by scope? What do I mean by scale? OK, we know that energy transition process will evolve over time. So for us, we really need to adopt. We need to evolve and we need to flex with the energy transition processes going forwards. That's something we're very keen to do. It's something we know that we're well positioned for, and it's something that we know will elevate Axis to a much higher specialty insurer. 

[00:08:09] Paul Lucas: 
All right. The only way is up, it seems, an exciting future and an exciting area of the market. No doubt one we'll be keeping our eyes on. Elliot, thanks so much for joining us. 

[00:08:17] Elliot Lyes: 
Thank you for having me, Paul. 

[00:08:22] Paul Lucas: 
And thanks, of course, to you too for watching. We'll see you next time right here on Insurance Business TV.