AXS
Axis Capital Holdings LTD
NYSE
8-K: AXIS Capital Reports Record Third Quarter Insurance Premiums and Strong Investment Income
Sentiment:
Investor Presentation
12 November 2024 8:00 AM
AXIS Capital Holdings Limited announced record third-quarter insurance premium production and a significant increase in net investment income, highlighting strong performance across key business segments.
Better than expected
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.
Summary
- AXIS Capital filed an investor presentation on November 12, 2024, detailing their third-quarter performance.
- The company reported a record $1.5 billion in gross premiums written for the insurance segment in the third quarter, the highest ever for a third quarter.
- Total gross premiums written for the quarter were $1.9 billion, a 2% increase year-over-year, with a 5% increase in the insurance segment and a 9% decrease in the reinsurance segment.
- New business premiums in the insurance segment totaled $482 million, with notable strength in Property, Accident & Health, and Credit and Political Risk lines.
- The insurance segment's premium production has grown at an average annual rate of 16% since Q3 2020.
- Net investment income reached a record $205 million for the third quarter, a 33% increase compared to $154 million in the same period last year.
- The company's annualized operating return on average common equity (ROACE) was 18.2% year-to-date.
- The diluted book value per common share increased by 9.0% in the quarter and 26.3% over the last 12 months, reaching $64.65.
- AXIS Capital has a financial strength rating of A/A+ from AM Best and S&P, with a debt-to-total capital ratio of 17.8%.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, record premium production, and increased investment income. The company's strategic focus and capital management are also positive indicators. However, there are some risks and challenges mentioned, which temper the overall sentiment slightly.
Positives
- The insurance segment achieved record third-quarter premium production.
- Net investment income saw a significant increase, reaching a record high.
- The company's diluted book value per common share has shown substantial growth.
- AXIS Capital maintains a strong financial strength rating from both AM Best and S&P.
- The company's 'How We Work' program is successfully reducing the G&A ratio.
- The company has a robust capital management strategy with share repurchases and consistent dividends.
Negatives
- The reinsurance segment experienced a 9% decrease in gross premiums written for the quarter.
- The combined ratio for the quarter was 93.1%, with the insurance segment at 90.4% and reinsurance at 91.4%.
Risks
- The company faces risks related to the cyclical nature of the insurance and reinsurance business.
- Natural and man-made disasters, including climate change and cyber-attacks, pose significant risks.
- There are risks associated with emerging claims, systemic risks, and coverage and regulatory issues.
- The company is exposed to credit and market risks, including fluctuations in interest rates and foreign currency exchange rates.
- Operational risks include technology failures and data security breaches.
- Changes in tax laws and governmental regulations could impact the company.
- The company is exposed to the adverse impact of social and economic inflation.
Future Outlook
The company aims to be the leading specialty underwriter, generating consistent top-quartile diluted book value per common share growth for shareholders. They plan to continue focusing on specialty products and expanding their presence in key markets.
Management Comments
- Management is focused on executing on ROACE drivers.
- Management is focused on delivering value to shareholders.
- Management is focused on consistent capital returns.
Industry Context
The announcement reflects a trend in the insurance industry towards specialization and a focus on underwriting profitability. AXIS Capital's emphasis on specialty products aligns with the broader market shift towards tailored risk transfer solutions. The company's growth in the US E&S market and London is consistent with industry trends.
Comparison to Industry Standards
- AXIS Capital is ranked 8th out of 41 insurance companies in 2023, indicating a strong position in the industry.
- The company's focus on specialty products is similar to other successful specialty insurers like W.R. Berkley and Markel.
- The 18.2% annualized operating ROACE is a strong result compared to the industry average, although specific benchmarks vary.
- The company's growth in diluted book value per share is a key metric that is closely watched by investors and is a key performance indicator for the company.
- The company's financial strength ratings of A/A+ from AM Best and S&P are in line with other top-tier insurers.
Stakeholder Impact
- Shareholders benefit from increased book value per share and consistent capital returns.
- Employees are impacted by the 'How We Work' program, which aims to enhance operations and productivity.
- Customers benefit from the company's focus on specialty products and tailored underwriting expertise.
- The company's strong financial position provides stability for suppliers and creditors.
Next Steps
- The company will continue to execute its strategic priorities.
- The company will continue to focus on profitable growth.
- The company will continue to manage capital efficiently.
- The company will continue to engage with the investor community.
Key Dates
- 2024-11-12: Date of the 8-K filing and investor presentation.
Keywords
insurance, reinsurance, premiums, investment income, ROACE, book value, financial results, underwriting, capital management, specialty insurance
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.