Earnings Reports: Validus Holdings, AXIS Capital

By Charles E. Boyle | April 30, 2012

Selected earnings highlights from Validus Holdings for the first quarter of 2012 are as follows:
                                                              Q1 2012         Q1   2011          
Gross premiums written ————       $837.299 mn   $849.89 mn
Net premiums written  —————      $730.24 mn     $740.07 mn
Net premiums earned  ————–        $451.2 mn         $429.53 mn  
Net income (loss) ——————           $124.234 mn   ($172.364 mn)             
Net Operating income (loss) ——-        $92.865 mn      ($165.448 mn)
Net realized investment gains —–        $7.352 mn          $6.379 mn
Net unrealized gain/loss  ———–        $22.671 mn      ($12.828 mn) 
Net investment income ————         $27.76 mn         $29.975 mn

Q1 combined ratio – 84.6 percent (143 percent in Q1 2011)

Chairman and CEO Ed Noonan commented: “I am pleased to report nearly $125 million in net income and annualized growth in diluted book value per share of 15.1 percent despite meaningful catastrophe losses in connection with the Costa Concordia sinking and severe tornado activity in the U.S. heartland. The net effect of the Costa Concordia loss, after the impact of reinstatement premiums was $63.1 million, which was within our pre-announced range of $50 million to $65 million. “The total effect of notable losses after reinstatement premiums was $84.5 million in the first quarter of 2012, as compared to $271.1 million for the first quarter of 2011.

“Validus continues to expand and leverage our core capabilities as evidenced by the announcement of the capitalization of PaCRe, Ltd. and continued development of AlphaCat. We have also received interest in, and are considering opportunities to, raise additional capital for one or more of our AlphaCat funds or managed accounts. These additional facilities allow Validus to better serve our customers, intermediaries and ultimately our shareholders through the growth of our business.

“With the January 1 and April 1 renewals behind us, we have plenty of capacity available for opportunities through the remainder of the year. Our balance sheet is strong and we continue to generate excess capital. We expect to become more active in capital management for the balance of 2012, while maintaining our capital in excess of our rating agency targets and stated risk appetites.”

The complete report and information on accessing the earnings conference call may be obtained on the company’s website.

Source: Validus Holdings

Selected earnings highlights from AXIS Capital, which include both its insurance and reinsurance operations, for the first quarter of 2012 are as follows:

                                                                Q1 2012        Q1   2011          
Gross premiums written ————         $1.525 bn        $1.548 bn
Net premiums written  —————       $1.367 bn        $1.40 bn
Net premiums earned  —————        $846.36  mn   $788.201 mn  
Net income (loss) ———————        $121.997 mn  ($383.76 mn)              
Operating income (loss) ———–            $135.73 mn    ($398.86 mn)
Net realized investment gains —– –      $14.49 mn        $30.144 mn)
Net investment income  ————–       $116.023 mn   $110.655 mn

Q1 combined ratio – 94.8 percent (161.3 percent in Q1 2011)

President and CEO John Charman commented: “AXIS ended the first quarter of 2012 with record diluted book value per common share of $39.53. We produced operating income per diluted share of $1.07 and an annualized operating ROACE of nearly 11 percent. These results were driven by good underwriting results, illustrated by a combined ratio of 94.8 percent, coupled with strong performance from the global capital markets.

“The exit from the bottom of the property and casualty pricing cycle maintained its steady progress. Pricing continued to firm through the quarter and into April renewals, particularly in catastrophe exposed classes. For lines of business where our global franchise maintains a meaningful participation, this ‘cycle change’ trend of pricing improvement is now visible in almost every geographic and every product line.

“However, these rate changes are gradual and are not yet sufficient to warrant a dramatic upscaling in our underwriting activity. Recognizing this transitional period for the industry, we remain judicious with our capacity and are totally focused on either preserving or expanding underwriting margin in order to drive value for our shareholders. We are very confident that our major global businesses are well positioned and ready to gain meaningfully when the supply of our capital is more appropriately compensated.”

The complete report and information on accessing the earnings conference call may be obtained on the company’s website.

Source: AXIS Capital

 

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