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AXIS Capital Reports Third Quarter Operating Income Of $197 Million, Or $1.74 Per Diluted Common Share

Stocks in this article: AXS

AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE:AXS) today reported net income available to common shareholders for the third quarter of 2013 of $137 million, or $1.21 per diluted common share, compared with $223 million, or $1.82 per diluted common share, for the third quarter of 2012. For the nine months ended September 30, 2013, AXIS Capital reported net income available to common shareholders of $512 million, or $4.41 per diluted common share, compared with $514 million, or $4.11 per diluted common share, for the corresponding period of 2012.

Operating income 1 for the third quarter of 2013 was $197 million, or $1.74 per diluted common share, compared with $201 million, or $1.63 per diluted common share, for the third quarter of 2012. For the nine months ended September 30, 2013, AXIS Capital reported operating income of $474 million, or $4.08 per diluted common share, compared with $449 million, or $3.60 per diluted common share, for the first nine months of 2012.

Third Quarter Highlights 2

  • Gross premiums written increased 7% to $905 million, with growth of 9% in our insurance segment and 4% in our reinsurance segment;
  • Net premiums written increased 10% to $716 million;
  • Net premiums earned increased 10% to $945 million;
  • Combined ratio of 86.3%, compared to 85.3%;
  • Current accident year loss ratio of 61.5%, compared to 58.3%;
  • Estimated natural catastrophe and weather-related pre-tax net losses (net of reinstatement premiums) of $51 million;
  • Net favorable prior year reserve development of $80 million (benefiting the combined ratio by 8.4 points), compared with $60 million (benefiting the combined ratio by 7.0 points);
  • Net investment income was comparable at $103 million;
  • Pre-tax total return on cash and investments of 1.4%, compared to 2.1%;
  • Net income available to common shareholders of $137 million, compared to $223 million;
  • Operating income of $197 million, compared to $201 million;
  • Net cash flows from operations of $432 million, compared to $424 million;
  • No share repurchases during the quarter;
  • Diluted book value per common share of $44.60, a 5% increase during the quarter and a 2% increase over the last 12 months; and
  • A.M. Best upgraded the financial strength rating of each of our operating (re)insurance subsidiaries to a financial strength rating of A+ (Superior) in September 2013.

Commenting on the third quarter 2013 financial results, Albert Benchimol, President and CEO of AXIS Capital said “We’re pleased to announce a very good quarter on all fronts. Our annualized operating return on average common equity was 15.6% for the quarter and our diluted book value per share increased 4.5%, with strong contributions from both underwriting and investments. Our global underwriting platform, breadth of products and excellent financial strength are all highly valued attributes in today’s marketplace, positioning us favorably to achieve our goals. We are confident our risk selection, combined with our disciplined attention to portfolio construction, will positively differentiate our Company and shareholder returns over the longer term. Our recent upgrade to A+ by A.M. Best is another testimony to our strong track record and the value of our global franchise in the marketplace.”

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