AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE: AXS) today reported net income available to common shareholders for the second quarter of 2012 of $168 million, or $1.35 per diluted common share, compared with $101 million, or $0.79 per diluted common share, for the second quarter of 2011. For the six months ended June 30, 2012, AXIS Capital reported net income available to common shareholders of $290 million, or $2.31 per diluted common share. During the first six months of 2011, we recognized a net loss to common shareholders of $283 million, or $2.38 per diluted common share. Our results for the first six months of 2011 were adversely impacted by $691 million of net-after tax losses from numerous natural catastrophe and weather events.
Operating income 1 for the second quarter of 2012 was $113 million, or $0.90 per diluted common share, compared with $83 million, or $0.65 per diluted common share, for the second quarter of 2011. For the six months ended June 30, 2012, AXIS Capital reported operating income of $249 million, or $1.98 per diluted common share, compared with an operating loss of $316 million, or $2.66 per diluted common share, for the first six months of 2011.
Second Quarter Highlights 2
- Gross premiums written decreased 3% to $1.0 billion;
- Net premiums written decreased 6% to $802 million;
- Net premiums earned increased 1% to $851 million;
- Combined ratio of 92.3%, compared to 98.9% for the same period last year;
- Estimated pre-tax net losses (net of reinstatement premiums) for second quarter 2012 U.S. weather events of $55 million;
- Upward revision of $22 million (net of reinstatement premiums) for first quarter 2012 U.S. weather events during the second quarter, but this amount was fully contained within the incurred but not reported ("IBNR") reserves established at March 31, 2012;
- No material change in our aggregate estimate for losses related to 2011 and 2010 calendar year natural catastrophe events during 2012;
- Net favorable prior year reserve development of $75 million, pre-tax, benefiting the combined ratio by 8.7 points, compared with $52 million in the prior year quarter, benefiting the combined ratio by 6.1 points;
- Net investment income of $74 million, a decrease of 26%;
- Total return on cash and investments of 0.5% (pre-tax), compared to 1.5% for the same period last year;
- Net cash flows from operations of $288 million;
- Operating income of $113 million, representing an annualized operating return on average common equity of 8.7%;
- Share repurchases totaled $90 million in the quarter;
- Tender offer for 7.5% Series B preferred shares closed in April, resulting in repurchase of $247 million;
- The transition in our senior leadership during the quarter resulted in separation payments and accelerated and incremental share-based compensation expenses totaling $34 million; and
- Diluted book value per common share of $40.55 at June 30, 2012, an increase of 3% during the quarter and 10% from June 30, 2011.
Commenting on the second quarter 2012 financial results, Albert Benchimol, Chief Executive Officer and President of AXIS Capital, stated: “We are pleased to report diluted book value per share, at $40.55, reached a new record at the end of the second quarter. Diluted book value per share growth, including dividends paid, was 12.8% over the last twelve months.