Bermuda-based AXIS Capital Holdings Limited reported net income available to common shareholders for the first quarter of 2015 of $156 million, or $1.54 per diluted common share, compared with $137 million, or $1.24 per diluted common share, for the first quarter of 2014.
Operating income for the first quarter of 2015 was $136 million, or $1.35 per diluted common share, compared to $137 million, or $1.24 per diluted common share, for the first quarter of 2014.
Other first quarter highlights for AXIS Capital include:
- Gross premiums written decreased 8 percent (4 percent on a constant currency basis) to $1.7 billion from $1.8 billion during the first quarter of 2014. Reinsurance segment gross premiums written during the first quarter of 2015 dropped by 12 percent to $1.1 billion (7 percent on a constant currency basis), primarily driven by the impact of multi-year premiums, while the company’s insurance segment gross premiums written were flat (up 1 percent on a constant currency basis);
- Net premiums written decreased 12 percent (8 percent on a constant currency basis) to $1.5 billion from $1.7 billion last year;
- Net premiums earned decreased 4 percent (3% on a constant currency basis) to $906 million, compared with $946 million last year;
- Combined ratio of 94.3 percent, compared to 91.9 percent during the first quarter in 2014;
- Current accident year loss ratio of 62.8 percent, compared to 62.1 percent;
- Low level of natural catastrophe and weather-related pre-tax net losses in both periods;
- Net favorable prior year reserve development of $50 million (benefiting the combined ratio by 5.5 points), compared to $43 million (benefiting the combined ratio by 4.6 points);
- Pre-tax merger costs related to the proposed amalgamation with PartnerRe Ltd. of $7 million included in corporate expenses;
- Net investment income of $92 million, compared to $83 million;
- Pre-tax total return on cash and investments of 0.7 percent, including foreign exchange movements, or 1.2 percent, excluding foreign exchange movements, compared to 1.1 percent, including or excluding foreign exchange movements;
- Share repurchases during the quarter totaling $15 million, compared to $179 million. Following the signing of a definitive amalgamation agreement with PartnerRe Ltd. on January 25, 2015, the company has suspended its open market share repurchase program until the closing date of the amalgamation transaction;
Commenting on the first quarter 2015 financial results, Albert Benchimol, president and CEO of AXIS Capital, said: “We are pleased to report first quarter operating income of $136 million, or $1.35 per diluted share, and annualized operating ROE of 10.3 percent. Adjusted for dividends, diluted book value grew 3 percent during the quarter and 13 percent over the last twelve months.”
The company’s solid underwriting results “reflected low catastrophe and weather-related losses, ongoing favorable reserve development and a broadly diversified, well-constructed portfolio of risks,” he went on to say. “Our results reflected our tactical responses to the market environment and, importantly, demonstrated progress on our targeted portfolio enhancements and operational excellence initiatives. These initiatives, combined with our meaningful market presence, our technical expertise and our financial strength, position us well to continue to deliver a strong value proposition for all of our stakeholders.”
AXIS Capital and PartnerRe Ltd. entered into a definitive amalgamation agreement on January 25, 2015. (That proposed deal recently came under threat when EXOR SpA made an unsolicited $6.4 billion buyout offer for PartnerRe. PartnerRe’s board is currently evaluating the cash offer.)
AXIS Capital said it continues to believe “that a merger between AXIS Capital and PartnerRe is in the best interests of our shareholders, clients, brokers and employees.”
AXIS said this strategic combination would create “one of the world’s preeminent specialty insurance and reinsurance companies, with gross premiums written in excess of $10 billion, total capital of more than $14 billion, and cash and invested assets of approximately $32 billion.”
Source: AXIS Capital
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