AXIS Capital Posts $72 Million Q2 Net Income; $50 Million Operating

July 31, 2013

Bermuda-based AXIS Capital Holdings Limited reported net income available to common shareholders for the second quarter of 2013 of $72 million, or $0.62 per diluted common share, compared with $168 million, or $1.35 per diluted common share, for the second quarter of 2012.

For the six months ended June 30, 2013, AXIS reported net income available to common shareholders of $375 million, or $3.19 per diluted common share, compared with $290 million, or $2.31 per diluted common share, for the corresponding period of 2012.

Operating income, which excludes investment gains and losses, for the second quarter of 2013 was $50 million, or $0.43 per diluted common share, compared with $113 million, or $0.90 per diluted common share, for the second quarter of 2012.

For the six months ended June 30, 2013, AXIS Capital reported operating income of $278 million, or $2.36 per diluted common share, compared with $249 million, or $1.98 per diluted common share, for the first six months of 2012.

In addition to the above earnings figures AXIS also listed the following highlights for the second quarter of 2013:
• Gross premiums written increased 20 percent to $1.2 billion, with growth of 29 percent in our reinsurance segment and 16 percent in our insurance segment;
• Net premiums written increased 24 percent to $993 million;
• Net premiums earned increased 11 percent to $946 million;
• Combined ratio of 101.7 percent, compared to 92.3 percent;
• Current accident year loss ratio of 72.4 percent, compared to 63.7 percent;
• Estimated natural catastrophe and weather-related pre-tax net losses (net of reinstatement premiums) of $140 million; tornadoes and hailstorms in the U.S. made the largest contribution to this amount, with flooding in Canada, Europe and Argentina also significant;
• Net favorable prior year reserve development of $42 million (benefiting the combined ratio by 4.4 points), compared with $75 million (benefiting the combined ratio by 8.7 points);
• Net investment income increased 12 percent to $83 million;
• Pre-tax total return on cash and investments of (1.3 percent), compared to 0.5 percent;
• Net cash flows from operations of $236 million, compared to $288 million;
• Share repurchases in the quarter totaling $228 million;
• Issued $225 million of 5.50 percent Series D preferred shares and redeemed the $100 million of 7.25 percent Series A preferred shares outstanding; and
• Diluted book value per common share of $42.67, a 4 percent decrease during the quarter and a 5 percent increase over the last 12 months.

President and CEO Albert Benchimol commented: “For the year-to-date, we have delivered a very healthy annualized operating ROACE of 10.9 percent. This year-to-date result is indicative of the ability of our portfolio to absorb volatility including that presented by a quarter like this one, which was marked by a very high frequency of unrelated small and mid-sized cat and weather events around the globe.

“We continue to make good progress in expanding our franchise with growth in attractive lines and markets, most notably in agriculture, accident & health, and our international operations, as we build a broader, more diversified portfolio. Our results still do not reflect the full leverage of all of the various strategic initiatives in progress at AXIS. These initiatives, combined with market conditions that present good opportunities in longstanding specialty lines at AXIS, position us well to continue to drive shareholder value.”

Source: AXIS Capital

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