AXIS Capital Reports Q4 Operating Income of $120M, Level with Q4 2014

February 3, 2016

AXIS Capital Holdings Ltd. reported net income available to common shareholders for the fourth quarter of 2015 of $135 million, or $1.39 per diluted common share, compared with net income of $164 million, or $1.60 per diluted common share, for the fourth quarter of 2014. Net income available to common shareholders for the full year 2015 was $602 million, or $6.04 per diluted common share, compared with $771 million, or $7.29 per diluted common share, for 2014.

The company’s operating income for the fourth quarter of 2015 was $120 million, or $1.23 per diluted common share, compared with an operating income of $120 million, or $1.18 per diluted common share, for the fourth quarter of 2014. For the full year 2015, AXIS Capital reported operating income of $401 million, or $4.02 per diluted common share, compared with operating income of $563 million, or $5.32 per diluted common share, for 2014.

Other full-year highlights include:

  • Gross premiums written decreased by $108 million to $4.6 billion (flat on a constant currency basis), with a decrease of $155 million, or 7 percent (4 percent on a constant currency basis) in the reinsurance segment, which was partially offset by an increase of $48 million, or 2 percent (4 percent on a constant currency basis), in the insurance segment;
  • Net premiums written decreased 6 percent (3 percent on a constant currency basis) to $3.7 billion and net premiums earned decreased by 5 percent (3 percent on a constant currency basis) to $3.7 billion;
  • Combined ratio of 94.7 percent, compared to 91.6 percent;
  • Current accident year loss ratio of 65.6 percent, compared to 63.2 percent;
  • Net favorable prior year reserve development of $243 million (benefiting the combined ratio by 6.6 points), compared to $259 million (benefiting the combined ratio by 6.7 points);
  • Total fee of $315 million received following the termination of the amalgamation agreement with PartnerRe Ltd., comprising a $280 million termination fee and $35 million received as reimbursement for merger related expenses;
  • Included in corporate expenses, PartnerRe merger-related costs of $36 million;
  • Pre-tax charges of $51 million relating to profitability enhancement initiatives announced during Q3 2015, including reorganization and related expenses of $46 million and corporate expenses of $5 million;
  • Net investment income decreased 11 percent to $305 million;

Fourth quarter highlights include:

  • Gross premiums written increased 5 percent (6 percent on a constant currency basis) to $800 million;
  • Net premiums written increased 7 percent (8 percent on a constant currency basis) to $595 million and net premiums earned decreased 4 percent (1 percent on a constant currency basis) to $922 million;
  • Estimated catastrophe and weather-related pre-tax net losses of $10 million, composed primarily of losses related to U.S. weather events, compared to $21 million incurred during the fourth quarter of 2014;
  • Net favorable prior year reserve development of $77 million (benefiting the combined ratio by 8.4 points) compared to $66 million (benefiting the combined ratio by 6.9 points);
  • Net investment income was flat at $79 million.

“We are pleased to report growth in diluted book value per share, adjusted for dividends, of 9 percent for 2015,” said Albert Benchimol, president and CEO of AXIS Capital.

“While 2015 was a challenging year on many fronts, it was also a year of powerful maturation across our organization, resulting in a stronger, more focused AXIS,” he added

“Over the course of the year, we steered the company towards a future of enhanced profitability and stability. Importantly, we are executing on the right actions for the current challenging market conditions – improving the quality of our book of business, growing the scale and profitability of recent initiatives, and tightening expense control and capital efficiency,” Benchimol went on to say.

“Normalizing for the unusual frequency of mid-sized energy losses this year, our results for the quarter and the year demonstrated progress on all of these fronts.”

Source: AXIS Capital Holdings

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