AXS
Axis Capital Holdings LTD
NYSE
8-K: AXIS Capital Reports $173 Million Net Income in Q3 2024, Driven by Strong Underwriting and Investment Performance
Sentiment:
Quarterly Report
30 October 2024 4:23 PM
AXIS Capital announced a net income of $173 million for the third quarter of 2024, demonstrating solid financial results amidst a high catastrophe quarter for the industry.
Better than expected
The company's operating income of $230 million and 17.3% annualized operating ROACE exceeded expectations.
The 9% increase in book value per diluted common share was better than anticipated.
The 33% increase in net investment income was a positive surprise.
Summary
- AXIS Capital reported a net income available to common shareholders of $173 million, or $2.04 per diluted common share, for the third quarter of 2024.
- Operating income for the quarter was $230 million, or $2.71 per diluted common share.
- The company's annualized return on average common equity (ROACE) was 13.0%, and the annualized operating ROACE was 17.3%.
- The combined ratio for the quarter was 93.1%.
- Book value per diluted common share increased to $64.65, a 9.0% increase compared to June 30, 2024, and a 26.3% increase compared to September 30, 2023.
- For the nine months ended September 30, 2024, net income available to common shareholders was $765 million, or $8.97 per diluted common share, and operating income was $700 million, or $8.21 per diluted common share.
- Net investment income for the third quarter of 2024 was $205 million, a 33% increase compared to the same period in 2023.
- Gross premiums written increased by 2% to $1.9 billion, while net premiums written increased by 27% to $1.2 billion.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, particularly in operating income and investment performance. While there are some challenges, the overall tone is optimistic and confident.
Positives
- AXIS Capital demonstrated strong profitability with a net income of $173 million in Q3 2024.
- The company's operating income of $230 million in Q3 2024 indicates efficient operations.
- The 17.3% annualized operating ROACE shows a strong return on equity.
- The 9.0% increase in book value per diluted common share from the previous quarter is a positive sign of growth.
- Net investment income increased by 33%, contributing significantly to the company's overall performance.
- The 'How We Work' program led to a 1.4 point improvement in the general and administrative expense ratio.
- The company returned $253 million to shareholders year-to-date, indicating a commitment to shareholder value.
Negatives
- Net income available to common shareholders decreased slightly from $181 million in Q3 2023 to $173 million in Q3 2024.
- The combined ratio of 93.1% indicates that the company is paying out 93.1 cents for every dollar of premium earned.
- Gross premiums written in the reinsurance segment decreased by 9% in Q3 2024.
- Underwriting income in the insurance segment decreased by 5.6% in Q3 2024.
Risks
- The company faced a high catastrophe quarter, with $78 million in pre-tax catastrophe and weather-related losses.
- The insurance segment experienced a 2.2 point increase in the combined ratio, reaching 90.4%.
- The reinsurance segment saw a 21.5% decrease in net premiums earned.
- The company is exposed to risks related to natural and man-made disasters, including climate change and cyber-attacks.
- There are risks associated with economic inflation and the failure of loss limitation methods.
- The company faces competition and consolidation in the insurance and reinsurance industry.
- There are risks related to changes in governmental regulations and tax laws.
Future Outlook
The company heads into the final months of 2024 with confidence in its future and a deep commitment to help AXIS realize its best potential as a specialty underwriting leader.
Management Comments
- Vince Tizzio, President and CEO of AXIS Capital, expressed sympathy for those impacted by Hurricanes Helene and Milton.
- He stated that AXIS produced consistent, profitable results in a high catastrophe quarter.
- He highlighted the company's 17.3% annualized operating ROE and 93.1% group combined ratio.
- He mentioned the double-digit growth in diluted book value per share over the last twelve months.
- He noted the 1.4 point improvement in the G&A ratio due to the 'How We Work' transformation initiative.
- He emphasized the company's focus on attractive growth markets and new revenue opportunities.
Industry Context
The results were achieved during a high catastrophe quarter for the industry, indicating AXIS Capital's resilience and ability to deliver consistent results despite challenging market conditions. The company's focus on specialty underwriting and operational efficiency aligns with broader industry trends towards profitability and risk management.
Comparison to Industry Standards
- AXIS Capital's combined ratio of 93.1% is comparable to other large insurers and reinsurers, but it is important to note that this is a high catastrophe quarter.
- The 17.3% operating ROACE is a strong result, indicating efficient use of capital compared to industry averages.
- The 9% increase in book value per diluted common share is a positive sign of growth, outperforming some peers.
- Companies like RenaissanceRe and Everest Re also operate in the reinsurance space and their results should be compared to AXIS Capital's to get a full picture of performance.
- The 33% increase in net investment income is a significant achievement, reflecting strong investment management compared to industry benchmarks.
Stakeholder Impact
- Shareholders benefit from the strong financial results, increased book value, and capital returns.
- Employees are impacted by the 'How We Work' program, which aims to improve efficiency.
- Customers benefit from the company's commitment to providing insurance and reinsurance solutions.
- The company's financial strength rating of 'A+' by Standard & Poor's and 'A' by A.M. Best provides confidence to stakeholders.
Next Steps
- The company will host a conference call on October 31, 2024, to discuss the third quarter financial results.
- The company will continue to enhance operating efficiency through the 'How We Work' transformation initiative.
- The company will continue to focus on attractive growth markets and new revenue opportunities.
Key Dates
- September 30, 2023: Reference date for prior year financial comparisons.
- December 31, 2023: Reference date for year-end financial comparisons.
- June 30, 2024: Reference date for prior quarter financial comparisons.
- September 30, 2024: End date of the reporting period for the third quarter results.
- October 30, 2024: Date of the press release and 8-K filing.
- October 31, 2024: Date of the conference call to discuss the third quarter financial results.
Keywords
insurance, reinsurance, financial results, net income, operating income, ROACE, combined ratio, book value, investment income, premiums, catastrophe losses
AXS
Axis Capital Holdings LTD
NYSE
Sector: Financial Services
Filings with Classifications
Better than expected
13 May 2025 4:30 PM
Investor Presentation
- The company reported record first quarter operating EPS.
- The company reported record diluted book value per share.
- The company reported the highest first quarter gross premiums written for the insurance segment.
Worse than expected
30 April 2025 4:23 PM
Quarterly Report
- Net income available to common shareholders decreased from $387.9 million to $186.5 million year over year.
- The effective tax rate increased from (46.0%) to 18.6% year over year.
Worse than expected
30 April 2025 4:20 PM
Earnings Release
- Net income available to common shareholders decreased compared to the same period last year.
Better than expected
3 April 2025 8:00 AM
Proxy Statement
- The company delivered a return on average common equity (ROACE) of 20.5% and an operating return on average common equity (OROACE) of 18.6%.
- Year-end diluted book value per share (DBVPS) grew by 20.7% to $65.27.
- Record operating earnings per diluted common share reached $11.18, a 98% increase over the prior year.
- The group combined ratio improved to 92.3%, a 7.6 point improvement.
- Total gross written premiums were a record $9 billion, up 7.8% over the prior year.
- Net investment income reached a record $759 million for the year.
Capital raise
26 February 2025 4:17 PM
Annual Results
- The company may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
- Any equity or debt financing, if available at all, may be on terms that are not favorable to us.
- As economic and market uncertainty continues, it is possible that access to the capital markets may become more constrained and cost of capital may increase.
Better than expected
10 February 2025 4:43 PM
Investor Presentation
- The company reported record operating EPS for Q4 and full year 2024.
- The company's diluted book value per share excluding AOCI increased by 17.5% year-over-year.
- Gross premiums written for the group was up 11% year over year to $2.0B for the quarter, the highest production fourth quarter ever.
Better than expected
29 January 2025 4:25 PM
Quarterly Report
- Net income available to common shareholders significantly increased compared to the previous year.
- Operating return on equity improved substantially.
- Diluted book value per share showed strong growth.
Better than expected
12 November 2024 8:00 AM
Investor Presentation
- The company reported record third-quarter insurance premium production.
- Net investment income reached a record high for the third quarter.
- The diluted book value per common share increased significantly.
Better than expected
30 October 2024 4:23 PM
Quarterly Report
- The company's operating income of $230 million and 17.3% annualized operating ROACE exceeded expectations.
- The 9% increase in book value per diluted common share was better than anticipated.
- The 33% increase in net investment income was a positive surprise.
Worse than expected
30 October 2024 4:23 PM
Quarterly Report
- The company's combined ratio of 93.1% indicates an underwriting loss, which is worse than expected.
- The company experienced significant foreign exchange losses of $92 million, which negatively impacted the results.
Better than expected
4 September 2024 6:56 AM
Investor Presentation
- The company reported record gross premiums written for the second quarter.
- The insurance segment achieved its highest ever production of gross premiums written.
- The company's annualized operating ROACE was 19.1%, indicating strong profitability.
- Net investment income increased by 40% compared to the same quarter last year.
- Diluted book value per share grew by 16.3% over the last 12 months.
Better than expected
30 July 2024 4:27 PM
Quarterly Report
- The company's net income available to common shareholders of $204 million, or $2.42 per common share, exceeded expectations.
- The company's operating income of $250 million, or $2.93 per diluted common share, was better than anticipated.
- The company's underwriting income of $161 million was a strong result.
Better than expected
30 July 2024 4:22 PM
Quarterly Report
- The company's net income, operating income, and operating ROACE all exceeded prior year results.
- The combined ratio improved, indicating better underwriting performance.
- Net investment income increased significantly, contributing to better overall results.
Better than expected
30 May 2024 8:45 AM
Investor Day Presentation
- The company's current accident year combined ratio has improved from 100% in 2021 to 96% in Q1 2024, indicating better underwriting performance.
- The company is targeting mid-teen diluted book value per share growth, which is an ambitious goal.
- The company has rebalanced its portfolio towards insurance, which is a higher margin business.
Better than expected
1 May 2024 4:23 PM
Quarterly Report
- The company's net income available to common shareholders significantly increased compared to the same period last year.
- The company's operating income showed a strong performance, indicating solid core business operations.
- The company's net investment income grew by 25%, contributing to overall profitability.
Better than expected
1 May 2024 4:19 PM
Quarterly Report
- The company's net income and operating income significantly exceeded the prior year's first quarter results.
- The annualized return on average common equity (ROACE) of 32.1% and operating ROACE of 18.2% are strong indicators of improved profitability.
- The specialty insurance business achieved a combined ratio of 86.6% and record premium production, demonstrating better than expected performance.
Better than expected
4 April 2024 8:29 AM
Proxy Statement
- The company achieved record premium production, strong operating income, meaningful growth in diluted book value per share, and significant improvement in the current accident year combined ratio.
Worse than expected
28 March 2024 5:11 PM
Credit Facility Amendment
- The reduction in the committed facility from $500 million to $300 million indicates a reduction in guaranteed credit availability, which is worse than the previous arrangement.
Worse than expected
26 February 2024 8:35 AM
Investor Presentation
- The reinsurance segment's combined ratio of 107.6% indicates underwriting losses, which is worse than expected.
Worse than expected
31 January 2024 4:28 PM
Quarterly Report
- The company reported a net loss for the quarter, primarily due to a significant adverse prior year reserve development, which was worse than expected.
Worse than expected
23 January 2024 4:11 PM
Preliminary Earnings Release
- The company had to strengthen its reserves by a significant $425 million pre-tax ($361 million post-tax), indicating worse than expected prior year loss development.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.