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With me on today’s call are Albert Benchimol, our President and CEO; and Joseph Henry our CFO. Before I turn the call over to Albert, I will remind everyone that statements made during this call, including the question-and-answer sessions, which are not historical facts, may be forward-looking statements within the meaning of the U.S. federal securities laws.Forward-looking statements contained in this presentation include, but are not necessarily limited to, information regarding our estimate of losses related to catastrophes, policies and other loss events; general economic, capital and credit market conditions; future growth prospects, financial results, and capital management initiatives; evaluation of losses and loss reserves; investment strategies, investment portfolio and market performance; impact to the marketplace with respect to changes in pricing models; and our expectations regarding pricing and other market conditions. These statements involve risks, uncertainties, and assumptions, which could cause actual results to differ materially from our expectations. For a discussion of these matters, please refer to the Risk Factors section in our most recent Form 10-K on file with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, this presentation contains information regarding operating income, which is a non-GAAP financial measure within the meaning of the U.S. federal securities laws. For a reconciliation of this item to the most directly comparable GAAP financial measure, please refer to our press release, which can be found on our website. With that, I’d like to turn the call over to Albert. Albert Benchimol Thank you Linda, and before I forget happy birthday. Good morning to everyone. AXIS has had a very good second quarter. On an operating basis we earned $0.90 per share which on annualized basis represents an 8.7% operating return on equity. Our underwriting performance was excellent with a reported combined ratio of 92.3.
Excluding the onetime expenses related to senior leadership transitions in the quarter, our run rate results which I believe are more relevant for the purposes of our discussion are even stronger with an adjusted combined ratio of 88.4, and an adjusted annualized operating return on equity of 11.3%.In addition to the senior leadership transition charges our results were also affected by the investment markets with lower interest rates and negative equity returns. Our investment portfolio delivered a total return of 0.5% for the quarter. Nevertheless our diluted book value per share grew almost 3% in the quarter to a record $40.55. Our diluted book value per share growth including dividends paid was a strong 12.8% over the last 12 months. The market environment for our business is showing ongoing improvement and we are taking advantage of marketing conditions and our position in the market to improve the balance and risk adjusted returns of our global portfolio. Our growth is strong in markets that have shown improvements in pricing, and in the lines were investments and products for geographic expansion in recent years is gaining traction. In other areas, which are for the most part stable or showing modest improvement in risk adjusted returns, we have been actively optimizing portfolio composition to expand margin. In some cases this has come with net premium reductions. But the resulting portfolio provides a more powerful base on which to grow in an improved market. We are confident that we’ve strategically and tactically positioned ourselves to deliver continued significant value growth to shareholders. At this point I will pass the call to Joe Henry our new CFO. Joe came to us from XL where he was a chief financial officer of the $4 billion insurance business. In addition, Joe was previously CFO at two public insurance companies. Joe brings to Axis 37 years of experience in finance and operations and we are very pleased to have him on our team. Joe?
Joe HenryThank you very much Albert, and good morning everyone. I’m very happy to be here at Axis and look forward to helping this company achieve its strategic goals. In six weeks it has been very easy to see why Axis has been so successful in the past and why we feel good about our future. We produced solid results for this quarter, increasing diluted book value per common share by 3% to another record high of $40.55. Our return on average common equity was 13% for the quarter, with operating ROE at 8.7%. Read the rest of this transcript for free on seekingalpha.com