AXIS Capital Posts $264 Million Q4 Net Income; FY $820 Million

Bermuda-based AXIS Capital Holdings Limited reported net income available to common shareholders for the fourth quarter of 2010 of $264 million, or $1.99 per diluted common share, compared with net income of $282 million, or $1.87 per diluted common share, for the fourth quarter of 2009.

Net income for the full year 2010 was $820 million, or $6.02 per diluted common share, compared with $461 million, or $3.07 per diluted common share in 2009.

Operating income for the fourth quarter of 2010 was $187 million, or $1.41 per diluted common share, compared with $276 million, or $1.83 per diluted common share, for the fourth quarter of 2009. Operating income for the full year 2010 was $627 million, or $4.60 per diluted common share, compared with $766 million, or $5.10 per diluted common share for 2009.

The earnings report also listed the following fourth quarter and full year highlights:
— Net premiums earned increased 6 percent in the quarter to $757 million and increased 6 percent to $2.9 billion for the year;
— Combined ratios of 85.6 percent and 88.7 percent for the quarter and year, respectively, compared to 77.5 percent and 79.3 percent;
— Net favorable prior year reserve development of $81 million in the quarter, pre-tax, benefiting the combined ratio by 10.7 points, compared with $120 million in the prior year quarter, benefiting the combined ratio by 16.8 points;
— Net investment income for the quarter declined 9 percent relative to the prior year quarter and 3 percent relative to the third quarter of this year to $108 million and net investment income for the year declined 12 percent to $407 million;
— Net cash flows from operations were $321 million for the quarter and $1.2 billion for the year;
— Operating income of $187 million for the quarter, representing an annualized operating return on average common equity2 of 14.3 percent and operating income for the full year of $627 million, representing an operating return on average common equity of 12.4 percent;
— Share repurchases under our authorized repurchase plan totaled $277 million in the quarter and $699 million in the year;
— Diluted book value per common share of $39.37 at December 31, 2010, an increase of 1 percent from September 30, 2010 and 17 percent from December 31, 2009;
— Quarterly common share dividend declared increased 10 percent to $0.23 per share.

President and CEO John Charman commented: “AXIS finished the year strongly with an annualized operating return on average common equity for the fourth quarter of 14.3 percent. Our 2010 operating return on average common equity was 12.4 percent and our diluted book value per share increased 17 percent during the year. Our combined ratio for 2010 was an excellent 88.7 percent. During the year, we also returned $820 million to shareholders through share repurchases and dividends.

“Over the last five years, we have increased book value per share at a compound annual rate of 16.5 percent. All of this has been accomplished despite a difficult economic environment, a challenging property and casualty insurance and reinsurance operating environment and a few relatively active and costly catastrophe years.

“During the year, we continued to invest heavily in our global underwriting platform that will allow for substantial and broad scalability of our profitable underwriting portfolio when the market turns. This scalability will positively impact a far more diversified profile of business than we have seen at AXIS in any period to date. In 2011, we will continue to strive for underwriting margin, manage risk more sharply each day, strongly position our investment portfolio for a rise in interest rates and prudently manage our capital. Regardless of the timing of the market turn, we believe we are strongly positioned to continue to generate market-leading book value growth for our shareholders.”

Source: AXIS Capital

Topics Profit Loss