AXIS Capital Reports $191 Million Q2 Net Income; $173 Million Operating

July 30, 2014

Bermuda-based AXIS Capital Holdings Limited reported net income available to common shareholders for the second quarter of 2014 of $191 million, or $1.79 per diluted common share, compared with $72 million, or $0.62 per diluted common share, for the second quarter of 2013.

Net income available to common shareholders for the six months ended June 30, 2014, was $328 million, or $3.03 per diluted common share, compared with $375 million, or $3.19 per diluted common share, for the corresponding period of 2013.

Operating income, which excludes capital gains/losses, for the second quarter of 2014 was $173 million, or $1.63 per diluted common share, compared with $50 million, or $0.43 per diluted common share, for the second quarter of 2013.

For the six months ended June 30, 2014, AXIS Capital reported operating income of $310 million, or $2.86 per diluted common share, compared with $278 million, or $2.36 per diluted common share, for the first six months of 2013.

The earnings report listed the following Q2 highlights:
– Gross premiums written increased 1 percent to $1.2 billion, with growth of 9 percent in our reinsurance segment partially offset by a decrease in written premiums of 3 percent in our insurance segment;
– Net premiums written increased 1 percent to $1.0 billion;
– Net premiums earned increased 6 percent to $1.0 billion;
– Combined ratio of 90.8 percent, compared to 101.7 percent;
– Current accident year loss ratio of 65.1 percent, compared to 72.4 percent;
– Estimated natural catastrophe and weather-related pre-tax net losses of $36 million, primarily related to U.S. weather events, compared to $140 million (net of reinstatement premiums) incurred during the second quarter of 2013;
– Net favorable prior year reserve development of $85 million (benefiting the combined ratio by 8.5 points), compared to $42 million (benefiting the combined ratio by 4.4 points);
– Net investment income of $115 million, compared to $83 million;
– Pre-tax total return on cash and investments of 1.6 percent, compared to (1.3 percent);
– Net income available to common shareholders of $191 million and annualized return on average common equity of 14.5 percent, compared to $72 million and 5.6 percent;
– Operating income of $173 million, representing an annualized operating return on average common equity of 13.1 percent, compared to $50 million and 3.9 percent;
– Net cash flows from operations of $241 million, compared to $236 million;
– Share repurchases during the quarter totaling $139 million;
– Diluted book value per common share of $49.69, a 5 percent increase during the quarter and a 16 percent increase over the last 12 months;
– Dividends declared of $0.27 per common share, compared to $0.25 per common share;
– Growth in diluted book value per common share adjusted for dividends of $2.83, or 6 percent, per common share.

President and CEO Albert Benchimol commented: “AXIS reported strong results for the second quarter, with operating income of $1.63 per diluted share, annualized operating ROE of 13.1 percent and diluted book value per share of $49.69 at the end of the quarter. Adjusted for dividends, diluted book value grew 6 percent during the quarter and 19 percent over last year.

“Underlying these results is the continued rebalancing of our portfolio toward lower volatility and non-correlating lines creating greater efficiency of capital overall. During this year, we have already repurchased 7 million shares, representing 6 percent of our opening equity, for $318 million, in addition to distributing $59 million in dividends to shareholders.

“Despite more challenging market conditions, I am highly confident in the power of our market presence and our delivery of service and technical know-how. We remain well positioned to access and win high quality business in all key markets. These attributes, combined with gains we expect to reap heading into 2015 from our various initiatives, independent of the property and casualty pricing cycle, will support our achievement of superior results with less volatility.”

Source: AXIS Capital

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