AXS
Axis Capital Holdings LTD
NYSE
8-K: AXIS Capital Reports Q1 2025 Net Income of $187 Million, Driven by Strong Underwriting Performance
Sentiment:
Earnings Release
30 April 2025 4:20 PM
AXIS Capital announces a solid first quarter in 2025, marked by a net income of $187 million and an operating income of $261 million, showcasing the strength of its specialty underwriting strategy.
Worse than expected
Net income available to common shareholders decreased compared to the same period last year.
Summary
- AXIS Capital Holdings Limited reported a net income available to common shareholders of $187 million, or $2.26 per diluted common share, for the first quarter of 2025.
- This compares to a net income of $388 million, or $4.53 per diluted common share, for the same period in 2024.
- Operating income for Q1 2025 was $261 million, or $3.17 per diluted common share, up from $220 million, or $2.57 per share, in Q1 2024.
- The company's annualized return on average common equity (ROACE) was 13.7%, and the annualized operating ROACE was 19.2%.
- The combined ratio was 90.2%, reflecting profitable underwriting despite natural catastrophe losses.
- Book value per diluted common share increased to $66.48, a 16.4% increase over the past twelve months.
- Gross premiums written increased by 5% to $2.8 billion, with growth in both the insurance and reinsurance segments.
- Net investment income increased by 24% to $208 million, driven by higher returns on cash, alternative investments, and fixed maturities.
- A loss portfolio transfer reinsurance agreement with Enstar was completed on April 24, 2025, covering $3.1 billion of net reserves.
- The company repurchased $440 million of common shares and paid $36 million in common share dividends during the quarter.
Sentiment
Score: 7
Explanation: The report presents a mixed picture. While operating income and certain key metrics improved, net income declined. The management commentary is positive, but the overall sentiment is cautiously optimistic.
Positives
- Operating income increased to $261 million, or $3.17 per diluted common share, compared to $220 million, or $2.57 per diluted common share, for the first quarter of 2024.
- Book value per diluted common share increased by $9.35, or 16.4%, over the past twelve months.
- Net investment income increased by $40 million, or 24%, compared to the first quarter of 2024.
- The insurance segment delivered an 86.7% combined ratio and $1.7 billion in gross premiums.
- The reinsurance business had a 92.3% combined ratio and $1.1 billion in premiums.
- General and administrative expense ratio decreased by 1.1 points, mainly driven by an increase in net premiums earned and efficiencies gained through our 'How We Work' program.
Negatives
- Net income available to common shareholders decreased to $187 million, or $2.26 per diluted common share, compared to $388 million, or $4.53 per diluted common share, for the first quarter of 2024.
- Pre-tax, catastrophe and weather-related losses, net of reinsurance, were $49 million, including $32 million attributable to California Wildfires.
- The current accident year loss ratio, excluding catastrophe and weather-related losses increased by 0.4 points in the reinsurance segment, principally due to higher loss ratios in several lines of business in the first quarter of 2025, compared to elevated loss experience in marine and aviation lines in the first quarter of 2024.
Risks
- The occurrence and magnitude of natural and man-made disasters, including the potential increase of our exposure to natural catastrophe losses due to climate change and the potential for inherently unpredictable losses from man-made catastrophes, such as cyber-attacks.
- The effects of emerging claims, systemic risks, and coverage and regulatory issues, including increasing litigation and uncertainty related to coverage definitions, limits, terms and conditions.
- General economic, capital and credit market conditions, including banking and commercial real estate sector instability, financial market illiquidity and fluctuations in interest rates, credit spreads, equity securities' prices, and/or foreign currency exchange rates and the evolving impacts from tariffs, sanctions or other trade tensions between the U.S. and other countries (including implementation of new tariffs and retaliatory measures).
- Increasing scrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders regarding environmental, social and governance matters.
Future Outlook
AXIS Capital is focused on driving bottom-line results and shaping a resilient portfolio that generates strong performance throughout the cycle, with continued targeted growth in attractive specialty markets and enhancements to its operations backbone.
Management Comments
- Vince Tizzio, President and CEO of AXIS Capital, stated that AXIS delivered another strong quarter of consistent, profitable performance.
- He highlighted the company's focus on driving bottom-line results and shaping a resilient portfolio.
- He noted the company's progress in enhancing its operations backbone, including leveraging data, technology, and AI.
Industry Context
The results reflect a competitive environment in the insurance and reinsurance industry, with AXIS Capital focusing on specialty underwriting to differentiate itself. The loss portfolio transfer with Enstar is a strategic move to manage legacy risks and optimize capital.
Comparison to Industry Standards
- A combined ratio of 90.2% is generally considered strong in the insurance industry, indicating profitable underwriting.
- Companies like Chubb, Allianz, and Zurich Insurance Group are benchmarks for global insurers, and AXIS Capital's focus on specialty lines aligns with strategies to achieve higher margins.
- The annualized operating ROACE of 19.2% is a solid return compared to the average ROE for the insurance industry.
- The LPT with Enstar is a common strategy used by insurers to manage legacy liabilities, similar to transactions undertaken by companies like AIG and Swiss Re.
Stakeholder Impact
- Shareholders will see a decrease in net income but an increase in book value per share.
- Employees may be impacted by the ongoing 'How We Work' program focused on simplifying the operating structure.
- Customers will benefit from AXIS Capital's continued focus on specialty underwriting and tailored solutions.
- Suppliers and creditors are likely to see continued stability in their relationships with AXIS Capital.
Next Steps
- AXIS Capital will host a conference call on May 1, 2025, to discuss the first quarter financial results and related matters.
- The company will continue to execute its strategy of targeted growth in attractive specialty markets.
- AXIS will continue enhancing its operations backbone including how it leverages data, technology and AI.
Key Dates
- January 1, 2023: The Company exited Aviation business effective this date.
- May 2024: Authorization under our Board-authorized share repurchase program for common share repurchases was approved.
- September 30, 2024: Net reserves for losses and loss expenses of approximately $3.1 billion for LPT with Enstar.
- December 31, 2024: Comparative balance sheet data provided.
- January 1, 2025: Corporate income tax of 15% applied to Bermuda pre-tax income effective this date.
- February 6, 2025: Authorization under our Board-authorized share repurchase program for common share repurchases approved in May 2024 was exhausted.
- February 19, 2025: The Company's Board of Directors approved a new share repurchase program for up to $400 million of the Company's common shares.
- March 31, 2025: End of the first quarter; book value per diluted common share was $66.48.
- April 24, 2025: Completion of loss portfolio transfer reinsurance agreement with Enstar.
- April 30, 2025: Date of the report and press release issuance.
- May 1, 2025: Scheduled conference call to discuss the first quarter financial results.
Keywords
AXIS Capital, Financial Results, First Quarter 2025, Net Income, Operating Income, Premiums Written, Combined Ratio, Reinsurance, Insurance, ROACE, Loss Portfolio Transfer, Enstar
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.