AXS
Axis Capital Holdings LTD
NYSE
10-Q: AXIS Capital Reports Q3 2024 Results: Net Income of $173 Million, Underwriting Income at $135 Million
Sentiment:
Quarterly Report
30 October 2024 4:23 PM
AXIS Capital Holdings Limited announced its third-quarter 2024 results, reporting a net income available to common shareholders of $173 million and underwriting income of $135 million.
Worse than expected
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.
Summary
- AXIS Capital reported a net income available to common shareholders of $173 million, or $2.06 per common share, for the third quarter of 2024.
- The company's operating income for the quarter was $230 million, or $2.71 per diluted common share.
- Gross premiums written totaled $1.9 billion, while net premiums written reached $1.2 billion.
- Net premiums earned were $1.4 billion for the quarter.
- The company experienced pre-tax catastrophe and weather-related losses, net of reinsurance, of $78 million, including $43 million from Hurricane Helene and Hurricane Beryl.
- Net favorable prior year reserve development was $8 million.
- Underwriting income was $135 million, with a combined ratio of 93.1%.
- Net investment income was $205 million, and net investment gains were $32 million.
- Foreign exchange losses amounted to $92 million.
- Total cash and investments were $18.1 billion, with fixed maturities, short-term investments, and cash equivalents comprising 88% of the total.
- Total assets were $32.7 billion, and the reserve for losses and loss expenses was $17.3 billion.
- The company's debt was $1.3 billion, with a debt to total capital ratio of 17.8%.
- AXIS Capital repurchased 542,000 common shares for a total of $40 million.
- Common shareholders' equity was $5.5 billion, with a book value per diluted common share of $64.65.
Sentiment
Score: 6
Explanation: The document presents a mixed picture with strong revenue growth and investment income, but also significant catastrophe losses and foreign exchange losses. The underwriting results are slightly negative, leading to a neutral to slightly positive sentiment.
Positives
- The company achieved a solid underwriting income of $135 million.
- Net investment income showed a strong performance at $205 million.
- The company's capital position remains robust with total assets of $32.7 billion.
- The company's book value per diluted common share increased to $64.65.
- The company's fixed maturities, short-term investments, and cash and cash equivalents have an average credit rating of AA-.
Negatives
- The company experienced significant foreign exchange losses of $92 million.
- Pre-tax catastrophe and weather-related losses, net of reinsurance, were $78 million.
- The combined ratio was 93.1%, indicating an underwriting loss.
Risks
- The company is exposed to the cyclical nature of the insurance and reinsurance business.
- Natural and man-made disasters, including climate change and cyber-attacks, pose a risk to the company's financial stability.
- Emerging claims, systemic risks, and regulatory issues could adversely affect the company.
- The company faces increased competition and consolidation in the insurance and reinsurance industry.
- Changes in the political environment and the loss of key executives could impact the company's operations.
- The company is exposed to general economic, capital, and credit market conditions, including banking and commercial real estate sector instability.
- The company faces liquidity risks and operational risks related to technology and data security.
- Changes in governmental regulations and tax laws could impact the company's profitability.
Future Outlook
The company anticipates favorable market conditions for specialty insurance and reinsurance carriers, with pricing momentum expected to continue in non-proportional reinsurance. AXIS Capital will continue to pursue targeted growth opportunities by employing a disciplined underwriting strategy and appetite.
Management Comments
- The company is committed to advancing AXIS as a specialty underwriting leader that delivers consistent, profitable growth.
- The company believes its market positioning, diversified book of business, specialty underwriting acumen, global platform, claims management capabilities, and deep distribution relationships, supported by a conservative and well performing investment portfolio, provides opportunity for continued and increased profitability.
Industry Context
The report indicates that the current property and casualty market trends are favorable for specialty insurance and reinsurance carriers. Pricing has moderated in some areas due to new capital entering the market, but AXIS Capital is focusing on sectors with strong premium adequacy metrics.
Comparison to Industry Standards
- The combined ratio of 93.1% is slightly above the industry benchmark of 90% for a profitable underwriting result, indicating room for improvement in underwriting efficiency.
- The net investment income of $205 million is a positive result, but the net investment gains of $32 million are volatile and may not be sustainable.
- The company's debt to total capital ratio of 17.8% is within acceptable industry standards, indicating a healthy capital structure.
- The book value per diluted common share of $64.65 is a positive indicator of the company's financial health and growth potential.
- Compared to peers like RenaissanceRe and Everest Re, AXIS Capital's results show a similar trend of strong premium growth but also exposure to catastrophe losses.
Stakeholder Impact
- Shareholders will see a positive increase in book value per diluted common share.
- Employees may be affected by the ongoing 'How We Work' program.
- Customers will benefit from the company's continued focus on providing a broad range of risk transfer products and services.
- Suppliers and creditors will be impacted by the company's financial performance and capital structure.
Next Steps
- The company will continue to focus on underwriting discipline to drive targeted profitable growth.
- The company will continue to pursue targeted growth opportunities by employing a disciplined underwriting strategy and appetite.
- The company will continue to implement a more focused distribution strategy while building mutually beneficial relationships with clients and partners.
- The company will continue to improve the effectiveness and efficiency of its operating platforms and processes through its 'How We Work' program.
Related Party Transactions
- The Company invested an additional $12 million in Monarch Point Re.
- The Company advanced $215 million to Monarch Point Re, with $169 million repaid during the period.
Key Dates
- April 1, 2024: AXIS Energy Transition Syndicate 2050 commenced underwriting.
- September 11, 2024: The Company repaid borrowings under the FHLB program of $10 million.
- October 25, 2024: There were 83,655,404 common shares outstanding.
- October 30, 2024: The date of the report.
Keywords
insurance, reinsurance, underwriting, investment, financial results, catastrophe losses, premiums, combined ratio, net income, operating income
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.