AXS
Axis Capital Holdings LTD
NYSE
10-Q: AXIS Capital Reports Second Quarter 2024 Results with Strong Underwriting Income
Sentiment:
Quarterly Report
30 July 2024 4:27 PM
AXIS Capital Holdings Limited announced a net income available to common shareholders of $204 million, or $2.42 per common share, for the second quarter of 2024.
Better than expected
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.
Summary
- AXIS Capital reported a net income available to common shareholders of $204 million, or $2.42 per common share, for the second quarter of 2024.
- The company's operating income was $250 million, or $2.93 per diluted common share.
- Gross premiums written reached $2.4 billion, with net premiums written at $1.6 billion and net premiums earned at $1.3 billion.
- Pre-tax catastrophe and weather-related losses, net of reinsurance, totaled $47 million, including $9 million attributable to the Red Sea Conflict.
- The company reported no prior year reserve development.
- Underwriting income was $161 million, with a combined ratio of 90.4%.
- Net investment income was $191 million, while net investment losses were $53 million.
- Foreign exchange gains were $7 million, and reorganization expenses were $14 million.
- Total cash and investments were $17.2 billion, with fixed maturities, short-term investments, and cash equivalents comprising 87% of the total.
- Total assets were $32.1 billion, and the reserve for losses and loss expenses was $16.7 billion.
- The company's debt was $1.3 billion, with a debt to total capital ratio of 18.8%.
- AXIS Capital repurchased 545,000 common shares for a total of $39 million.
- Common shareholders' equity was $5.1 billion, with a book value per diluted common share of $59.29.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong underwriting income and a solid investment portfolio, although there are some concerns about investment losses and catastrophe events. The company's strategic focus and financial strength contribute to a positive sentiment.
Positives
- The company achieved strong underwriting income of $161 million.
- Net investment income was a solid $191 million.
- The company's combined ratio was a healthy 90.4%.
- AXIS Capital has a strong cash and investment position of $17.2 billion.
- The company's book value per diluted common share increased to $59.29.
- The company's new energy transition syndicate commenced underwriting.
Negatives
- Net investment losses were $53 million.
- Reorganization expenses were $14 million.
- Pre-tax catastrophe and weather-related losses, net of reinsurance, were $47 million, including $9 million attributable to the Red Sea Conflict.
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.
- Emerging claims, systemic risks, and regulatory issues could impact the company.
- The company faces increased competition and consolidation in the industry.
- Changes in the political environment and loss of major brokers could affect business.
- The company is exposed to credit and market risks, including banking and commercial real estate sector instability.
- Operational risks, including technology and data security issues, are present.
- Changes in governmental regulations and tax laws could impact the company.
Future Outlook
The company anticipates favorable market conditions, with continued positive rate changes across casualty classes, though price increases are expected to moderate. AXIS Capital will focus on underwriting discipline and targeted growth opportunities within specialty and casualty reinsurance lines.
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.
- The company continues to pursue selective profitable growth areas where premium adequacy metrics remain strong and where market dislocations create opportunity.
Industry Context
The report reflects a trend of moderating price increases in the specialty insurance sector due to increased capacity, while AXIS Capital continues to focus on profitable growth areas and disciplined underwriting.
Comparison to Industry Standards
- AXIS Capital's combined ratio of 90.4% for the quarter is competitive with industry benchmarks for specialty insurers.
- The company's net investment income of $191 million is a strong result compared to peers, though net investment losses of $53 million are a concern.
- The company's book value per diluted common share of $59.29 is a positive indicator of shareholder value.
- Compared to peers like Chubb and The Hartford, AXIS Capital's focus on specialty lines and reinsurance provides a different risk profile and growth trajectory.
- The company's catastrophe losses of $47 million are within expected ranges for a global insurer, but the Red Sea conflict impact is a unique factor.
- The company's share repurchase program is a common practice among insurers to return capital to shareholders, similar to programs at companies like Alleghany and RenaissanceRe.
Stakeholder Impact
- Shareholders benefit from the company's strong financial performance and share repurchase program.
- Employees are impacted by the company's 'How We Work' program, which includes reorganization expenses.
- Customers benefit from the company's broad range of risk transfer products and services.
- Distribution partners benefit from the company's strong capacity and mutually beneficial relationships.
Next Steps
- The company will continue to focus on underwriting discipline to drive targeted profitable growth.
- The company will continue to implement a more focused distribution strategy.
- The company will continue to invest in data and technology capabilities.
- The company will continue to grow its corporate citizenship program.
Related Party Transactions
- The company invested $10 million in Monarch Point Re, a collateralized reinsurer jointly sponsored by the company and Stone Point.
- The company advanced $164 million to Monarch Point Re, with $95 million repaid during the period.
- The company entered into a reinsurer novation and replacement agreement with Harrington Re and a third party reinsurer.
Key Dates
- April 1, 2024: AXIS Energy Transition Syndicate 2050 commenced underwriting.
- June 30, 2024: End of the reporting period for the quarterly results.
- July 29, 2024: There were 84,181,033 common shares outstanding.
- July 30, 2024: Date of the report.
Keywords
insurance, reinsurance, underwriting, investment, financial results, premiums, losses, catastrophe, combined ratio, capital, share repurchase, financial performance
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.