AXIS Capital Posts $172 Million Q4 Net Income; $284 Million Full Year

February 5, 2014

Bermuda-based AXIS Capital Holdings Limited reported a net income available to common shareholders for the fourth quarter of 2013 of $172 million, or $1.52 per diluted common share, compared with a net loss of $19 million, or $0.16 per diluted common share, for the fourth quarter of 2012.

Net income available to common shareholders for the full year 2013 was $684 million, or $5.93 per diluted common share, compared with $495 million, or $4.00 per diluted common share, for 2012.

AXIS said its operating income, which excludes capital gain/loss, for the fourth quarter of 2013 was $159 million, or $1.41 per diluted common share, compared with an operating loss of $28 million, or $0.23 per diluted common share, for the fourth quarter of 2012. For the full year 2013, AXIS Capital reported operating income of $633 million, or $5.49 per diluted common share, compared with operating income of $422 million, or $3.41 per diluted common share, for 2012.

AXIS listed the following highlights for 2013:                                                                                                                                            – Gross premiums written increased 13 percent to $4.7 billion, with growth of $308 million, or 17 percent in our reinsurance segment and $250 million, or 11 percent, in our insurance segment;                                                                              – Net premiums written increased 18 percent to $3.9 billion and net premiums earned increased 9 percent to $3.7 billion; – Combined ratio of 91.0 percent (including 5.3 points related to 2013 natural catastrophe and weather-related losses), compared with 96.2 percent (including 12.7 points related to 2012 natural catastrophe and weather-related events);             - Net favorable prior year reserve development of $219 million (benefiting the combined ratio by 5.9 points), compared to $245 million (benefiting the combined ratio by 7.1   points)                                                                                                                  -Pre-tax total return on cash and investments of 1.6 percent, compared to 5.4 percent;                                                                  – Net investment income increased 7 percent to $409 million;                                                                                                             - Net income available to common shareholders of $684 million and return on average common equity of 13.1 percent, compared to $495 million and 9.7 percent;                                                                                                                                                  – Operating income of $633 million, representing an operating return on average common equity of 12.1 percent, compared to operating income of $422 million, representing an operating return on average common equity of 8.2 percent;                                                                                                                                                                                                               – Net cash flows from operations of $1.1 billion, comparable to $1.1 billion in 2012;                                                                          – Share repurchases total of $472 million for the year;                                                                                                                              – Diluted book value per common share of $45.80, a 7 percent increase from December 31, 2012; and                                     Growth in diluted book value per share, adjusted for dividends declared during the year, of $3.85 per common share.

Fourth Quarter Highlights included the following:                                                                                                                                   – Gross premiums written increased 10 percent to $826 million;                                                                                                          – Net premiums written increased 25 percent to $648 million and net premiums earned increased 10 percent to $942 million;                                                                                                                                                                                                                 – No significant natural catastrophe or weather-related losses;                                                                                                               – Net favorable prior year reserve development of $43 million (benefiting the combined ratio by 4.6 points) compared to $65 million (benefiting the combined ratio by 7.5 points);                                                                                                                       – Net investment income increased 31 percent to $114 million;

President and CEO Albert Benchimol commented: “AXIS had a good fourth quarter and a good year. Financially, it was a year of solid progress. Despite mixed markets, we increased our net written premiums by 18 percent for the year while delivering an operating ROE of 12.1 percent. Notwithstanding a difficult interest rate environment, we grew diluted book value per share 7 percent for the year. We rewarded investors by again returning effectively all of our operating profits through dividends and buybacks, and we raised our dividend for the ninth consecutive year. With total assets of $20 billion and total capital of $6.8 billion, we have never been stronger.

“2013 was also a year of gratifying achievement in numerous entrepreneurial initiatives. Among our milestone accomplishments this year was our establishment of a presence at Lloyd’s. We reentered the retail primary casualty markets and wholesale small-account excess casualty in the U.S. We expanded existing specialties – such as our highly successful professional, energy and marine lines – into new geographies, notably Asia and Australia.”

Source: AXIS Capital Holdings

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