For the fourth quarter of 2024, the Company reports:
- Annualized return on average common equity ("ROACE") of
20.7% and annualized operating ROACE of 18.2%
- Combined ratio of 94.2%
- Gross premiums written increased by $191 million, or
11%
For the year ended 2024, the Company reports:
- Net income available to common shareholders of $1.1 billion,
or $12.35 per diluted common share, and operating income of $952
million, or $11.18 per diluted common share
- Return on average common equity ("ROACE") of 20.5% and
operating ROACE of 18.6%
- Combined ratio of 92.3%
- Book value per diluted common share of $65.27, an increase
of $11.21, or 20.7%, compared to December 31, 2023
AXIS Capital Holdings Limited ("AXIS Capital" or "AXIS" or "the
Company") (NYSE: AXS) today announced financial results for the
fourth quarter ended December 31, 2024.
Commenting on the 2024 financial results, Vince Tizzio,
President and CEO of AXIS Capital, said:
"2024 was an excellent year for AXIS. We
delivered on the financial and operational guideposts that we
shared at our Investor Day this past May, highlighted by an
operating return-on-equity of 18.6% and 20.7% growth in diluted
book value per share.
As a global leader in specialty underwriting,
we continued to find attractive opportunities for growth. In our
Insurance business, profitability was highlighted by an 89.1%
combined ratio for the full year and we grew 7.7%, to reach $6.6
billion in premiums. Our Reinsurance business is producing strong,
consistent profits with a 91.8% combined ratio for the full year
while growing 7.9% to $2.4 billion in premiums.
In 2024, we made significant strides in
enhancing our operating model through our 'How We Work program'.
This included building new capabilities, investing in technology
and data, and adding strong talent to complement our existing team.
As we progress into 2025, we believe AXIS is poised to build on its
positive momentum, while leveraging our specialty expertise to help
our customers navigate an increasingly dynamic risk landscape."
Consolidated Highlights*
- Net income available to common shareholders for the year ended
December 31, 2024 was $1.1 billion, or $12.35 per diluted common
share, compared to net income available to common shareholders of
$346 million, or $4.02 per diluted common share, for the same
period in 2023.
- Operating income1 for the year ended December 31, 2024 was $952
million, or $11.18 per diluted common share1, compared to operating
income of $486 million, or $5.65 per diluted common share, for the
same period in 2023.
- Current accident year combined ratio, excluding catastrophe and
weather-related losses of 89.5% for the fourth quarter of 2024, and
88.5% for the year ended December 31, 2024, increased by 0.6 points
compared to the fourth quarter of 2023, and improved by 0.6 points
compared to the prior year, respectively.
- Net investment income for the fourth quarter of 2024 was $196
million, compared to $187 million, for the fourth quarter of 2023,
an increase of $9 million or 5%, primarily attributable to income
from our fixed maturities portfolio due to increased yields,
partially offset by lower returns on alternative investments.
- Book yield of fixed maturities was 4.5% at December 31, 2024,
compared to 4.2% at December 31, 2023. The market yield was 5.3% at
December 31, 2024.
- Fees related to arrangements with strategic capital partners
for the year ended December 31, 2024 of $85 million, compared to
$61 million in the prior year.
- Income tax benefit for the fourth quarter of 2024 was $19
million principally due to adjustments related to certain deferred
tax assets and deferred tax liabilities that are no longer required
and an increase in the Bermuda net deferred tax asset associated
with Bermuda corporate income tax, effective January 1, 2025.
Excluding these tax benefits, the effective tax rate was 5.4%
driven by pre-tax income in our U.K. and U.S operations. Income tax
benefit for the year ended December 31, 2024, was $56 million
principally due to the Bermuda net deferred tax asset, and
adjustments related to certain deferred tax assets and deferred tax
liabilities that are no longer required. Excluding these tax
benefits, the effective tax rate was 13.8% driven by pre-tax income
in our U.S., U.K., and European operations.
- Book value per diluted common share was $65.27 at December 31,
2024, an increase of $0.62, or 1.0%, compared to September 30,
2024, driven by net income, partially offset by net unrealized
investment losses, and common share dividends declared of $0.44 per
share.
- Book value per diluted common share increased by $11.21, or
20.7%, over the past twelve months, driven by net income, and net
unrealized investment gains, partially offset by common share
dividends declared of $1.76 per share.
- Adjusted for net unrealized investment losses, after-tax, book
value per diluted common share was $67.93 at December 31, 2024, an
increase of $2.69, or 4.1%, compared to $65.24 at September 30,
2024, and an increase of $9.88, or 17.0%, compared to $58.05 at
December 31, 2023.
- Total capital returned to common shareholders was $350 million
year to date, including share repurchases of $200 million pursuant
to our Board-authorized share repurchase programs, and dividends of
$150 million.
* Amounts may not reconcile due
to rounding differences.
1 Operating income (loss) and
operating income (loss) per diluted common share are non-GAAP
financial measures as defined in SEC Regulation G. The
reconciliations to the most comparable GAAP financial measures, net
income (loss) available (attributable) to common shareholders and
earnings (loss) per diluted common share, respectively, and a
discussion of the rationale for the presentation of these items are
provided later in this press release.
Fourth Quarter Consolidated Underwriting
Highlights2
- Gross premiums written increased by $191 million, or 11% ($178
million, or 10%, on a constant currency basis(3)), to $2.0 billion
with an increase of $117 million, or 7% in the insurance segment,
and an increase of $74 million, or 37% in the reinsurance
segment.
- Net premiums written increased by $153 million, or 14%, to $1.2
billion with an increase of $88 million, or 9% in the insurance
segment, and an increase of $65 million, or 64% in the reinsurance
segment.
Quarters ended December
31,
KEY RATIOS
2024
2023
Change
Current accident year loss ratio,
excluding catastrophe and weather-related losses(4) (5)
55.7
%
55.4
%
0.3 pts
Catastrophe and weather-related losses
ratio(5)
5.9
%
2.1
%
3.8 pts
Current accident year loss ratio(5)
61.6
%
57.5
%
4.1 pts
Prior year reserve development ratio
(1.2
%)
33.6
%
(34.8 pts)
Net losses and loss expenses ratio
60.4
%
91.1
%
(30.7 pts)
Acquisition cost ratio
20.1
%
20.1
%
— pts
General and administrative expense
ratio
13.7
%
13.4
%
0.3 pts
Combined ratio
94.2
%
124.6
%
(30.4 pts)
Current accident year combined
ratio(5)
95.4
%
91.0
%
4.4 pts
Current accident year combined ratio,
excluding catastrophe and weather-related losses(5)
89.5
%
88.9
%
0.6 pts
- Pre-tax catastrophe and weather-related losses, net of
reinsurance, were $81 million ($64 million, after-tax), (Insurance:
$80 million; Reinsurance: $1 million), or 5.9 points, including $53
million, or 3.9 points attributable to Hurricane Milton. The
remaining losses were primarily attributable to other
weather-related events.
- Net favorable (adverse) prior year reserve development was $16
million (Insurance: $12 million; Reinsurance: $4 million), compared
to $(425) million (Insurance: $(182) million; Reinsurance: $(243)
million) in 2023.
2 All comparisons are with the
same period of the prior year, unless otherwise stated.
3 Amounts presented on a constant
currency basis are non-GAAP financial measures as defined in SEC
Regulation G. The constant currency basis is calculated by applying
the average foreign exchange rate from the current year to prior
year amounts. The reconciliations to the most comparable GAAP
financial measures is provided above and a discussion of the
rationale for the presentation of these items is provided later in
this press release.
4 The current accident year loss
ratio, excluding catastrophe and weather-related losses is
calculated by dividing the current accident year losses less
pre-tax catastrophe and weather-related losses, net of reinsurance,
by net premiums earned less reinstatement premiums.
5 Current accident year loss
ratio, catastrophe and weather-related losses ratio, current
accident year loss ratio, excluding catastrophe and weather-related
losses, current accident year combined ratio, and current accident
year combined ratio, excluding catastrophe and weather-related
losses are non-GAAP financial measures as defined in SEC Regulation
G. The reconciliations to the most comparable GAAP financial
measure, net losses and loss expenses ratio is provided above and a
discussion of the rationale for the presentation of these items is
provided later in this press release.
Full Year Consolidated Underwriting
Highlights
- Gross premiums written increased by $649 million, or 8%, to
$9.0 billion with an increase of $475 million, or 8% in the
insurance segment, and an increase of $175 million, or 8% in the
reinsurance segment.
- Net premiums written increased by $655 million, or 13%, to $5.8
billion with an increase of $492 million, or 13% in the insurance
segment, and an increase of $163 million, or 12% in the reinsurance
segment.
Years ended December
31,
KEY RATIOS
2024
2023
Change
Current accident year loss ratio,
excluding catastrophe and weather-related losses
55.7
%
55.9
%
(0.2 pts)
Catastrophe and weather-related losses
ratio
4.3
%
2.7
%
1.6 pts
Current accident year loss ratio
60.0
%
58.6
%
1.4 pts
Prior year reserve development ratio
(0.5
%)
8.1
%
(8.6 pts)
Net losses and loss expenses ratio
59.5
%
66.7
%
(7.2 pts)
Acquisition cost ratio
20.2
%
19.7
%
0.5 pts
General and administrative expense
ratio
12.6
%
13.5
%
(0.9 pts)
Combined ratio
92.3
%
99.9
%
(7.6 pts)
Current accident year combined ratio
92.8
%
91.8
%
1.0 pts
Current accident year combined ratio,
excluding catastrophe and weather-related losses
88.5
%
89.1
%
(0.6 pts)
- Pre-tax catastrophe and weather-related losses, net of
reinsurance, were $226 million ($182 million, after-tax),
(Insurance: $216 million; Reinsurance: $10 million), or 4.3 points,
including $111 million or 2.1 points attributable to Hurricane
Milton, Hurricane Helene and Hurricane Beryl, together with $13
million, or 0.3 points attributable to the Red Sea Conflict. The
remaining losses were primarily attributable to other
weather-related events.
- Net favorable (adverse) prior year reserve development was $24
million (Insurance: $16 million; Reinsurance: $8 million), compared
to $(412) million (Insurance: $(176) million; Reinsurance: $(236)
million) in 2023.
- General and administrative expense ratio decreased by 0.9
points, mainly driven by an increase in net premiums earned and
efficiencies gained through our "How We Work" program, together
with an increase in fees related to arrangements with strategic
capital partners, partially offset by an increase in
performance-related compensation costs.
Segment Highlights
Insurance Segment
Quarters ended December
31,
($ in thousands)
2024
2023
Change
Gross premiums written
$
1,700,337
$
1,583,378
7.4%
Net premiums written
1,058,083
969,871
9.1%
Net premiums earned
1,026,025
916,779
11.9%
Underwriting income (loss)
90,449
(61,675
)
nm
Underwriting ratios:
Current accident year loss ratio,
excluding catastrophe and weather-related losses
52.2
%
52.0
%
0.2 pts
Catastrophe and weather-related losses
ratio
7.8
%
2.5
%
5.3 pts
Current accident year loss ratio
60.0
%
54.5
%
5.5 pts
Prior year reserve development ratio
(1.2
%)
19.8
%
(21.0 pts)
Net losses and loss expenses ratio
58.8
%
74.3
%
(15.5 pts)
Acquisition cost ratio
19.5
%
19.1
%
0.4 pts
Underwriting-related general and
administrative expense ratio
12.9
%
13.3
%
(0.4 pts)
Combined ratio
91.2
%
106.7
%
(15.5 pts)
Current accident year combined ratio
92.4
%
86.9
%
5.5 pts
Current accident year combined ratio,
excluding catastrophe and weather-related losses
84.6
%
84.4
%
0.2 pts
nm - not meaningful is defined as a
variance greater than +/- 100%
- Gross premiums written increased by $117 million, or 7% ($103
million, or 6%, on a constant currency basis), primarily
attributable to increases in property, accident and health, and
credit and political risk lines driven by new business, partially
offset by a decrease in cyber lines principally due to a lower
level of premiums associated with program business.
- Net premiums written increased by $88 million, or 9% ($81
million, or 8%, on a constant currency basis), reflecting the
increase in gross premiums written in the quarter, together with
decreased cession rates in cyber and property lines, partially
offset by increased cession rates in accident and health
lines.
- The current accident year loss ratio, excluding catastrophe and
weather-related losses is consistent with recent quarters.
- The acquisition cost ratio increased by 0.4 points, primarily
related to an increase in profit commission expense driven by
improved loss performance in accident and health lines and a
decrease in ceding commission mainly in professional lines.
- The underwriting-related general and administrative expense
ratio decreased by 0.4 points, mainly driven by increases in net
premiums earned and efficiencies gained through our "How We Work"
program, partially offset by an increase in performance-related
compensation costs.
Insurance Segment
Years ended December
31,
($ in thousands)
2024
2023
Change
Gross premiums written
$
6,615,584
$
6,140,764
7.7%
Net premiums written
4,250,545
3,758,720
13.1%
Net premiums earned
3,926,036
3,461,700
13.4%
Underwriting income
427,866
260,944
64.0%
Underwriting ratios:
Current accident year loss ratio,
excluding catastrophe and weather-related losses
52.1
%
51.8
%
0.3 pts
Catastrophe and weather-related losses
ratio
5.5
%
3.2
%
2.3 pts
Current accident year loss ratio
57.6
%
55.0
%
2.6 pts
Prior year reserve development ratio
(0.4
%)
5.1
%
(5.5 pts)
Net losses and loss expenses ratio
57.2
%
60.1
%
(2.9 pts)
Acquisition cost ratio
19.5
%
18.7
%
0.8 pts
Underwriting-related general and
administrative expense ratio
12.4
%
13.7
%
(1.3 pts)
Combined ratio
89.1
%
92.5
%
(3.4 pts)
Current accident year combined ratio
89.5
%
87.4
%
2.1 pts
Current accident year combined ratio,
excluding catastrophe and weather-related losses
84.0
%
84.2
%
(0.2 pts)
- Gross premiums written increased by $475 million, or 8% ($457
million, or 7%, on a constant currency basis), attributable to all
lines of business with the exception of cyber lines which decreased
principally due to lower levels of premiums associated with program
business and premium adjustments, and liability lines which
decreased principally due to underwriting actions taken to
reposition the portfolio.
- Net premiums written increased by $492 million, or 13%,
reflecting the increase in gross premiums written together with
decreased cession rates in cyber, professional lines and property
lines.
- The underwriting-related general and administrative expense
ratio decreased by 1.3 points, mainly driven by an increase in net
premiums earned and efficiencies gained through our "How We Work"
program, partially offset by an increase in performance-related
compensation costs.
Reinsurance Segment
Quarters ended December
31,
($ in thousands)
2024
2023
Change
Gross premiums written
$
274,987
$
200,915
36.9%
Net premiums written
167,466
102,384
63.6%
Net premiums earned
350,989
348,494
0.7%
Underwriting income (loss)
39,053
(212,398
)
nm
Underwriting ratios:
Current accident year loss ratio,
excluding catastrophe and weather-related losses
66.0
%
64.5
%
1.5 pts
Catastrophe and weather-related losses
ratio
0.3
%
0.8
%
(0.5 pts)
Current accident year loss ratio
66.3
%
65.3
%
1.0 pts
Prior year reserve development ratio
(1.2
%)
69.8
%
(71.0 pts)
Net losses and loss expenses ratio
65.1
%
135.1
%
(70.0 pts)
Acquisition cost ratio
21.8
%
22.6
%
(0.8 pts)
Underwriting-related general and
administrative expense ratio
4.0
%
5.1
%
(1.1 pts)
Combined ratio
90.9
%
162.8
%
(71.9 pts)
Current accident year combined ratio
92.1
%
93.0
%
(0.9 pts)
Current accident year combined ratio,
excluding catastrophe and weather-related losses
91.8
%
92.2
%
(0.4 pts)
nm - not meaningful
- Gross premiums written increased by $74 million, or 37%,
primarily attributable to accident and health lines driven by new
business, and motor, accident and health, and professional lines
largely due to premium adjustments.
- Net premiums written increased by $65 million, or 64%,
reflecting the increase in gross premiums written in the quarter
together with a decrease in premiums ceded in liability lines.
- The current accident year loss ratio, excluding catastrophe and
weather-related losses is consistent with recent periods.
- The acquisition cost ratio decreased by 0.8 points, primarily
related to an increase in ceding commissions from retrocessional
agreements.
- The underwriting-related general and administrative expense
ratio decreased by 1.1 points, mainly driven by an increase in fees
related to arrangements with strategic capital partners.
Reinsurance Segment
Years ended December
31,
($ in thousands)
2024
2023
Change
Gross premiums written
$
2,390,304
$
2,215,761
7.9%
Net premiums written
1,506,806
1,343,605
12.1%
Net premiums earned
1,380,199
1,622,081
(14.9%)
Underwriting income (loss)
143,610
(100,182
)
nm
Underwriting ratios:
Current accident year loss ratio,
excluding catastrophe and weather-related losses
66.0
%
64.8
%
1.2 pts
Catastrophe and weather-related losses
ratio
0.7
%
1.6
%
(0.9 pts)
Current accident year loss ratio
66.7
%
66.4
%
0.3 pts
Prior year reserve development ratio
(0.5
%)
14.6
%
(15.1 pts)
Net losses and loss expenses ratio
66.2
%
81.0
%
(14.8 pts)
Acquisition cost ratio
22.0
%
21.7
%
0.3 pts
Underwriting-related general and
administrative expense ratio
3.6
%
4.9
%
(1.3 pts)
Combined ratio
91.8
%
107.6
%
(15.8 pts)
Current accident year combined ratio
92.3
%
93.0
%
(0.7 pts)
Current accident year combined ratio,
excluding catastrophe and weather-related losses
91.6
%
91.4
%
0.2 pts
nm - not meaningful
- Gross premiums written increased by $175 million, or 8%,
primarily attributable to all lines of business, with the exception
of liability lines and run-off lines largely associated with new
business and increased line sizes.
- Net premiums written increased by $163 million, or 12%,
reflecting the increase in gross premiums written.
- The underwriting-related general and administrative expense
ratio decreased by 1.3 points, mainly driven by an increase in fees
related to arrangements with strategic capital partners, partially
offset by a decrease in net premiums earned.
Investments
Quarters ended December
31,
Years ended December
31,
($ in thousands)
2024
2023
2024
2023
Net investment income
$
195,773
$
186,937
$
759,229
$
611,742
Net investments gains (losses)
(108,030
)
23,041
(138,534
)
(74,630
)
Change in net unrealized gains (losses) on
fixed maturities, pre-tax(6)
(228,736
)
466,386
125,742
448,477
Interest in income (loss) of equity method
investments
7,264
1,328
17,953
4,163
Total
$
(133,729
)
$
677,692
$
764,390
$
989,752
Average cash and investments(7)
$
18,097,432
$
16,395,033
$
17,409,516
$
16,155,418
Pre-tax, total return on average cash
and investments:
Including investment related foreign
exchange movements
(0.7
%)
4.1
%
4.4
%
6.1
%
Excluding investment related foreign
exchange movements(8)
(0.2
%)
3.8
%
4.8
%
5.8
%
- Net investment income increased by $9 million, or 5%, compared
to the fourth quarter of 2023, primarily attributable to income
from our fixed maturities portfolio due to increased yields,
partially offset by lower returns on alternative investments.
- Net investment gains (losses) recognized in net income (loss)
for the quarter primarily related to net realized losses on the
sale of fixed maturities and net unrealized losses on bond mutual
funds included in equity securities.
- Change in net unrealized gains (losses) on fixed maturities,
pre-tax of $(229) million ($(153) million excluding foreign
exchange movements) recognized in other comprehensive income (loss)
in the quarter due to a decrease in the market value of our fixed
maturities portfolio attributable to increased yields, compared to
change in net unrealized gains, pre-tax of $466 million ($422
million excluding foreign exchange movements) recognized during the
fourth quarter of 2023.
- Book yield of fixed maturities was 4.5% at December 31, 2024,
compared to 4.2% at December 31, 2023. The market yield was 5.3% at
December 31, 2024.
6 Change in net unrealized gains
(losses) on fixed maturities is calculated by taking net unrealized
gains (losses) at period end less net unrealized gains (losses) at
the prior period end.
7 The average cash and
investments balance is the average of the monthly fair value
balances.
8 Pre-tax total return on cash
and investments excluding foreign exchange movements is a non-GAAP
financial measure as defined in SEC Regulation G. The
reconciliation to pre-tax total return on cash and investments, the
most comparable GAAP financial measure, also included foreign
exchange (losses) gains of $(104) million and $60 million for the
quarters ended December 31, 2024 and 2023, respectively and foreign
exchange (losses) gains of $(63) million and $51 million for the
years ended December 31, 2024 and 2023, respectively.
Capitalization / Shareholders’
Equity
December 31,
December 31,
($ in thousands)
2024
2023
Change
Total capital(9)
$
7,404,558
$
6,576,910
$
827,648
- Total capital of $7.4 billion included $1.3 billion of debt and
$550 million of preferred equity, compared to $6.6 billion at
December 31, 2023, with the increase driven by net income, and net
unrealized investment gains reported in accumulated other
comprehensive income (loss), partially offset by common share
dividends declared, and the repurchase of common shares, including
$200 million repurchased pursuant to our Board-authorized share
repurchase programs.
- At December 31, 2024, we had $200 million of remaining
authorization under our open-ended Board-authorized share
repurchase program for common share repurchases.
Book Value per diluted common
share
December 31,
September 30,
December 31,
2024
2024
2023
Book value per diluted common
share(10)
$
65.27
$
64.65
$
54.06
- Dividends declared were $0.44 per common share in the current
quarter and $1.76 per common share over the past twelve
months.
Three months ended,
Twelve months ended,
December 31, 2024
December 31, 2024
Change
% Change
Change
% Change
Book value per diluted common share
$
0.62
1.0
%
$
11.21
20.7
%
Book value per diluted common share -
adjusted for dividends declared
$
1.06
1.6
%
$
12.97
24.0
%
- Book value per diluted common share increased by $0.62 in the
quarter, driven by net income, partially offset by net unrealized
investment losses reported in accumulated other comprehensive
income (loss), and common share dividends declared, and increased
by $11.21 over the past twelve months, driven by net income, and
net unrealized investment gains reported in accumulated other
comprehensive income (loss), partially offset by the common share
dividends declared.
- Adjusted for net unrealized investment losses, after-tax,
reported in accumulated other comprehensive income (loss), book
value per diluted common share was $67.93.
9 Total capital represents the
sum of total shareholders' equity and debt.
10 Calculated using the treasury
stock method.
Conference Call
We will host a conference call on Thursday, January 30, 2025 at
8:30 a.m. (EST) to discuss the fourth quarter and year-end
financial results and related matters. The teleconference can be
accessed by dialing 1-877-883-0383 (U.S. callers), or
1-412-902-6506 (international callers), and entering the passcode
0758123 approximately ten minutes in advance of the call. A live,
listen-only webcast of the call will also be available via the
Investor Information section of our website at www.axiscapital.com.
A replay of the teleconference will be available for two weeks by
dialing 1-877-344-7529 (U.S. callers), or 1-412-317-0088
(international callers), and entering the passcode 7722438. The
webcast will be archived in the Investor Information section of our
website.
In addition, an investor financial supplement for the quarter
ended December 31, 2024 is available in the Investor Information
section of our website.
About AXIS Capital AXIS Capital, through its operating
subsidiaries, is a global specialty underwriter and provider of
insurance and reinsurance solutions. The Company has shareholders’
equity of $6.1 billion at December 31, 2024, and locations in
Bermuda, the United States, Europe, Singapore and Canada. Its
operating subsidiaries have been assigned a financial strength
rating of "A+" ("Strong") by Standard & Poor’s and "A"
("Excellent") by A.M. Best. For more information about AXIS
Capital, visit our website at www.axiscapital.com.
Website and Social Media Disclosure We use our website
(www.axiscapital.com) and our corporate LinkedIn (AXIS Capital) and
X Corp. (@AXIS_Capital) accounts as channels of distribution of
Company information. The information we post through these channels
may be deemed material. Accordingly, investors should monitor these
channels, in addition to following our press releases, SEC filings
and public conference calls and webcasts. In addition, e-mail
alerts and other information about AXIS Capital may be received by
those enrolled in our "E-mail Alerts" program which can be found in
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AXIS CAPITAL HOLDINGS
LIMITED
CONSOLIDATED BALANCE
SHEETS
DECEMBER 31, 2024 (UNAUDITED)
AND DECEMBER 31, 2023
2024
2023
(in thousands)
Assets
Investments:
Fixed maturities, available for sale, at
fair value
$
12,152,753
$
12,234,742
Fixed maturities, held to maturity, at
amortized cost
443,400
686,296
Equity securities, at fair value
579,274
588,511
Mortgage loans, held for investment, at
fair value
505,697
610,148
Other investments, at fair value
930,278
949,413
Equity method investments
206,994
174,634
Short-term investments, at fair value
223,666
17,216
Total investments
15,042,062
15,260,960
Cash and cash equivalents
2,143,471
953,476
Restricted cash and cash equivalents
920,150
430,509
Accrued interest receivable
114,012
106,055
Insurance and reinsurance premium balances
receivable
3,169,355
3,067,554
Reinsurance recoverable on unpaid losses
and loss expenses
6,840,897
6,323,083
Reinsurance recoverable on paid losses and
loss expenses
546,287
575,847
Deferred acquisition costs
524,837
450,950
Prepaid reinsurance premiums
1,936,979
1,916,087
Receivable for investments sold
3,693
8,767
Goodwill
66,498
100,801
Intangible assets
175,967
186,883
Operating lease right-of-use assets
92,516
108,093
Loan advances made
247,775
305,222
Other assets
695,794
456,385
Total assets
$
32,520,293
$
30,250,672
Liabilities
Reserve for losses and loss expenses
$
17,218,929
$
16,434,018
Unearned premiums
5,211,865
4,747,602
Insurance and reinsurance balances
payable
1,713,798
1,792,719
Debt
1,315,179
1,313,714
Federal Home Loan Bank advances
66,380
85,790
Payable for investments purchased
269,728
26,093
Operating lease liabilities
106,614
123,101
Other liabilities
528,421
464,439
Total liabilities
26,430,914
24,987,476
Shareholders' equity
Preferred shares
550,000
550,000
Common shares
2,206
2,206
Additional paid-in capital
2,394,063
2,383,030
Accumulated other comprehensive income
(loss)
(267,557
)
(365,836
)
Retained earnings
7,341,569
6,440,528
Treasury shares, at cost
(3,930,902
)
(3,746,732
)
Total shareholders' equity
6,089,379
5,263,196
Total liabilities and shareholders'
equity
$
32,520,293
$
30,250,672
AXIS CAPITAL HOLDINGS
LIMITED
CONSOLIDATED STATEMENTS OF
OPERATIONS
FOR THE QUARTERS AND YEARS
ENDED DECEMBER 31, 2024 AND 2023
Quarters ended
Years ended
2024
(Unaudited)
2023
(Unaudited)
2024
(Unaudited)
2023
(in thousands, except per
share amounts)
Revenues
Net premiums earned
$
1,377,014
$
1,265,273
$
5,306,235
$
5,083,781
Net investment income
195,773
186,937
759,229
611,742
Net investment gains (losses)
(108,030
)
23,041
(138,534
)
(74,630
)
Other insurance related income
7,016
6,050
30,721
22,495
Total revenues
1,471,773
1,481,301
5,957,651
5,643,388
Expenses
Net losses and loss expenses
831,956
1,152,262
3,158,487
3,393,102
Acquisition costs
276,273
253,918
1,070,551
1,000,945
General and administrative expenses
189,186
169,849
666,202
684,446
Foreign exchange losses (gains)
(112,090
)
69,871
(50,822
)
58,115
Interest expense and financing costs
16,761
18,344
67,766
68,421
Reorganization expenses
—
—
26,312
28,997
Amortization of intangible assets
2,729
2,729
10,917
10,917
Total expenses
1,204,815
1,666,973
4,949,413
5,244,943
Income (loss) before income taxes and
interest in income of equity method investments
266,958
(185,672
)
1,008,238
398,445
Income tax (expense) benefit
19,410
41,762
55,595
(26,316
)
Interest in income of equity method
investments
7,264
1,328
17,953
4,163
Net income (loss)
293,632
(142,582
)
1,081,786
376,292
Preferred share dividends
7,563
7,563
30,250
30,250
Net income (loss) available
(attributable) to common shareholders
$
286,069
$
(150,145
)
$
1,051,536
$
346,042
Per share data
Earnings (loss) per common
share:
Earnings (loss) per common share
$
3.43
$
(1.76
)
$
12.49
$
4.06
Earnings (loss) per diluted common
share
$
3.38
$
(1.76
)
$
12.35
$
4.02
Weighted average common shares
outstanding
83,380
85,268
84,165
85,142
Weighted average diluted common shares
outstanding
84,695
85,268
85,176
86,012
Cash dividends declared per common
share
$
0.44
$
0.44
$
1.76
$
1.76
AXIS CAPITAL HOLDINGS
LIMITED
CONSOLIDATED SEGMENTAL DATA
(UNAUDITED)
FOR THE QUARTERS ENDED
DECEMBER 31, 2024 AND 2023
2024
2023
Insurance
Reinsurance
Total
Insurance
Reinsurance
Total
(in thousands)
Gross premiums written
$
1,700,337
$
274,987
$
1,975,324
$
1,583,378
$
200,915
$
1,784,293
Net premiums written
1,058,083
167,466
1,225,549
969,871
102,384
1,072,255
Net premiums earned
1,026,025
350,989
1,377,014
916,779
348,494
1,265,273
Other insurance related income (loss)
40
6,976
7,016
(289
)
6,339
6,050
Net losses and loss expenses
(603,311
)
(228,645
)
(831,956
)
(681,515
)
(470,747
)
(1,152,262
)
Acquisition costs
(199,606
)
(76,667
)
(276,273
)
(175,050
)
(78,868
)
(253,918
)
Underwriting-related general and
administrative expenses(11)
(132,699
)
(13,600
)
(146,299
)
(121,600
)
(17,616
)
(139,216
)
Underwriting income (loss)(12)
$
90,449
$
39,053
129,502
$
(61,675
)
$
(212,398
)
(274,073
)
Net investment income
195,773
186,937
Net investment gains (losses)
(108,030
)
23,041
Corporate expenses(11)
(42,887
)
(30,633
)
Foreign exchange (losses) gains
112,090
(69,871
)
Interest expense and financing costs
(16,761
)
(18,344
)
Amortization of intangible assets
(2,729
)
(2,729
)
Income (loss) before income taxes
and interest in income of equity method investments
266,958
(185,672
)
Income tax benefit
19,410
41,762
Interest in income of equity method
investments
7,264
1,328
Net income (loss)
293,632
(142,582
)
Preferred share dividends
7,563
7,563
Net income (loss) available
(attributable) to common shareholders
$
286,069
$
(150,145
)
Net losses and loss expenses ratio
58.8
%
65.1
%
60.4
%
74.3
%
135.1
%
91.1
%
Acquisition cost ratio
19.5
%
21.8
%
20.1
%
19.1
%
22.6
%
20.1
%
Underwriting-related general and
administrative expense ratio
12.9
%
4.0
%
10.6
%
13.3
%
5.1
%
11.0
%
Corporate expense ratio
3.1
%
2.4
%
Combined ratio
91.2
%
90.9
%
94.2
%
106.7
%
162.8
%
124.6
%
11 Underwriting-related general
and administrative expenses is a non-GAAP financial measure as
defined in SEC Regulation G. The reconciliation to general and
administrative expenses, the most comparable GAAP financial
measure, also included corporate expenses of $43 million and $31
million for the quarters ended December 31, 2024 and 2023,
respectively. Underwriting-related general and administrative
expenses and corporate expenses are included in the general and
administrative expense ratio.
12 Consolidated underwriting
income (loss) is a non-GAAP financial measure as defined in SEC
Regulation G. The reconciliation to net income (loss), the most
comparable GAAP financial measure, is presented above.
AXIS CAPITAL HOLDINGS
LIMITED
CONSOLIDATED SEGMENTAL
DATA
FOR THE YEARS ENDED DECEMBER
31, 2024 (UNAUDITED) AND 2023
2024
2023
Insurance
Reinsurance
Total
Insurance
Reinsurance
Total
(in thousands)
Gross premiums written
$
6,615,584
$
2,390,304
$
9,005,888
$
6,140,764
$
2,215,761
$
8,356,525
Net premiums written
4,250,545
1,506,806
5,757,351
3,758,720
1,343,605
5,102,325
Net premiums earned
3,926,036
1,380,199
5,306,235
3,461,700
1,622,081
5,083,781
Other insurance related income (loss)
94
30,627
30,721
(198
)
22,693
22,495
Net losses and loss expenses
(2,245,420
)
(913,067
)
(3,158,487
)
(2,080,001
)
(1,313,101
)
(3,393,102
)
Acquisition costs
(766,915
)
(303,636
)
(1,070,551
)
(648,463
)
(352,482
)
(1,000,945
)
Underwriting-related general and
administrative expenses(13)
(485,929
)
(50,513
)
(536,442
)
(472,094
)
(79,373
)
(551,467
)
Underwriting income (loss)(14)
$
427,866
$
143,610
571,476
$
260,944
$
(100,182
)
160,762
Net investment income
759,229
611,742
Net investment gains (losses)
(138,534
)
(74,630
)
Corporate expenses(13)
(129,760
)
(132,979
)
Foreign exchange (losses) gains
50,822
(58,115
)
Interest expense and financing costs
(67,766
)
(68,421
)
Reorganization expenses
(26,312
)
(28,997
)
Amortization of intangible assets
(10,917
)
(10,917
)
Income before income taxes and interest
in income of equity method investments
1,008,238
398,445
Income tax (expense) benefit
55,595
(26,316
)
Interest in income of equity method
investments
17,953
4,163
Net income
1,081,786
376,292
Preferred share dividends
30,250
30,250
Net income available to common
shareholders
$
1,051,536
$
346,042
Net losses and loss expenses ratio
57.2
%
66.2
%
59.5
%
60.1
%
81.0
%
66.7
%
Acquisition cost ratio
19.5
%
22.0
%
20.2
%
18.7
%
21.7
%
19.7
%
Underwriting-related general and
administrative expense ratio
12.4
%
3.6
%
10.2
%
13.7
%
4.9
%
10.9
%
Corporate expense ratio
2.4
%
2.6
%
Combined ratio
89.1
%
91.8
%
92.3
%
92.5
%
107.6
%
99.9
%
13 Underwriting-related general and
administrative expenses is a non-GAAP financial measure as defined
in SEC Regulation G. The reconciliation to general and
administrative expenses, the most comparable GAAP financial
measure, also included corporate expenses of $130 million and $133
million for the years ended December 31, 2024 and 2023,
respectively. Underwriting-related general and administrative
expenses and corporate expenses are included in the general and
administrative expense ratio.
14 Consolidated underwriting income (loss)
is a non-GAAP financial measure as defined in SEC Regulation G. The
reconciliation to net income (loss), the most comparable GAAP
financial measure, is presented above.
AXIS CAPITAL HOLDINGS
LIMITED
NON-GAAP FINANCIAL MEASURES
RECONCILIATION (UNAUDITED)
OPERATING INCOME AND OPERATING
RETURN ON AVERAGE COMMON EQUITY
FOR THE QUARTERS AND YEARS
ENDED DECEMBER 31, 2024 AND 2023
Quarters ended
Years ended
2024
2023
2024
2023
(in thousands, except per
share amounts)
Net income (loss) available (attributable)
to common shareholders
$
286,069
$
(150,145
)
$
1,051,536
$
346,042
Net investment (gains) losses
108,030
(23,041
)
138,534
74,630
Foreign exchange losses (gains)
(112,090
)
69,871
(50,822
)
58,115
Reorganization expenses
—
—
26,312
28,997
Interest in income of equity method
investments
(7,264
)
(1,328
)
(17,953
)
(4,163
)
Bermuda net deferred tax asset (15)
(14,218
)
—
(176,923
)
—
Income tax benefit (16)
(8,711
)
(2,348
)
(18,649
)
(17,488
)
Operating income (loss)
$
251,816
$
(106,991
)
$
952,035
$
486,133
Earnings (loss) per diluted common
share
$
3.38
$
(1.76
)
$
12.35
$
4.02
Net investment (gains) losses
1.28
(0.27
)
1.63
0.87
Foreign exchange losses (gains)
(1.32
)
0.82
(0.60
)
0.68
Reorganization expenses
—
—
0.31
0.34
Interest in income of equity method
investments
(0.09
)
(0.02
)
(0.21
)
(0.05
)
Bermuda net deferred tax asset
(0.17
)
—
(2.08
)
—
Income tax benefit
(0.11
)
(0.02
)
(0.22
)
(0.21
)
Operating income (loss) per diluted common
share
$
2.97
$
(1.25
)
$
11.18
$
5.65
Weighted average diluted common shares
outstanding
84,695
85,268
85,176
86,012
Average common shareholders' equity
$
5,536,303
$
4,598,202
$
5,126,288
$
4,401,553
Annualized return on average common
equity
20.7
%
(13.1
%)
20.5
%
7.9
%
Annualized operating return on average
common equity (17)
18.2
%
(9.3
%)
18.6
%
11.0
%
15 Net deferred tax benefit due to the
recognition of deferred tax assets net of deferred tax liabilities
related to a future Bermuda corporate income tax rate of 15%,
pursuant to the Corporate Income Tax Act 2023.
16 Tax expense (benefit) associated with
the adjustments to net income (loss) available (attributable) to
common shareholders. Tax impact is estimated by applying the
statutory rates of applicable jurisdictions.
17 Annualized operating return on average
common equity ("operating ROACE") is a non-GAAP financial measure
as defined in SEC Regulation G. The reconciliation to annualized
ROACE, the most comparable GAAP financial measure is presented in
the table above, and a discussion of the rationale for its
presentation is provided later in this press release.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts included in this press
release, including statements regarding our estimates, beliefs,
expectations, intentions, strategies or projections are
forward-looking statements. We intend these forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements in the United States federal securities
laws. In some cases, these statements can be identified by the use
of forward-looking words such as "may", "should", "could",
"anticipate", "estimate", "expect", "plan", "believe", "predict",
"potential", "aim", "will", "target", "intend" or similar
expressions. These forward-looking statements are not historical
facts, and are based on current expectations, estimates and
projections, and various assumptions, many of which, by their
nature, are inherently uncertain and beyond management's
control.
Forward-looking statements contained in this press release may
include, but are not limited to, information regarding our
estimates for losses and loss expenses, measurements of potential
losses in the fair value of our investment portfolio and derivative
contracts, our expectations regarding the performance of our
business, our financial results, our liquidity and capital
resources, the outcome of our strategic initiatives, our
expectations regarding pricing, and other market and economic
conditions including the liquidity of financial markets,
developments in the commercial real estate market, inflation, our
growth prospects, and valuations of the potential impact of
movements in interest rates, credit spreads, equity securities'
prices, and foreign currency exchange rates.
Forward-looking statements only reflect our expectations and are
not guarantees of performance. These statements involve risks,
uncertainties, and assumptions. Accordingly, there are or will be
important factors that could cause actual events or results to
differ materially from those indicated in such statements. We
believe that these factors include, but are not limited to, the
following:
Insurance Risk
- the cyclical nature of insurance and reinsurance business
leading to periods with excess underwriting capacity and
unfavorable premium rates;
- the occurrence and magnitude of natural and man-made disasters,
including the potential increase of our exposure to natural
catastrophe losses due to climate change and the potential for
inherently unpredictable losses from man-made catastrophes, such as
cyber-attacks;
- the effects of emerging claims, systemic risks, and coverage
and regulatory issues, including increasing litigation and
uncertainty related to coverage definitions, limits, terms and
conditions;
- actual claims exceeding reserves for losses and loss
expenses;
- losses related to the conflict in the Middle East, the Russian
invasion of Ukraine, terrorism and political unrest, or other
unanticipated losses;
- the adverse impact of social and economic inflation;
- the failure of any of the loss limitation methods we
employ;
- the failure of our cedants to adequately evaluate risks;
- the use of industry models and changes to these models;
Strategic Risk
- increased competition and consolidation in the insurance and
reinsurance industry;
- general economic, capital and credit market conditions,
including banking and commercial real estate sector instability,
financial market illiquidity and fluctuations in interest rates,
credit spreads, equity securities' prices, and/or foreign currency
exchange rates;
- changes in the political environment of certain countries in
which we operate or underwrite business;
- the loss of business provided to us by major brokers;
- a decline in our ratings with rating agencies;
- the loss of one or more of our key executives;
- increasing scrutiny and evolving expectations from investors,
customers, regulators, policymakers and other stakeholders
regarding environmental, social and governance matters;
- the adverse impact of contagious diseases (including COVID-19)
on our business, results of operations, financial condition, and
liquidity;
Credit and Market Risk
- the inability to purchase reinsurance or collect amounts due to
us from reinsurance we have purchased;
- the failure of our policyholders or intermediaries to pay
premiums;
- breaches by third parties in our program business of their
obligations to us;
Liquidity Risk
- the inability to access sufficient cash to meet our obligations
when they are due;
Operational Risk
- changes in accounting policies or practices;
- difficulties with technology and/or data security;
- the failure of the processes, people or systems that we rely on
to maintain our operations and manage the operational risks
inherent to our business, including those outsourced to third
parties;
Regulatory Risk
- changes in governmental regulations and potential government
intervention in our industry;
- inadvertent failure to comply with certain laws and regulations
relating to sanctions, foreign corrupt practices, data protection
and privacy; and
Risks Related to Taxation
Readers should carefully consider the risks noted above together
with other factors including but not limited to those described
under Item 1A, 'Risk Factors' in our most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission
("SEC"), as those factors may be updated from time to time in our
periodic and other filings with the SEC, which are accessible on
the SEC's website at www.sec.gov.
We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Rationale for the Use of Non-GAAP Financial
Measures
We present our results of operations in a way we believe will be
meaningful and useful to investors, analysts, rating agencies and
others who use our financial information to evaluate our
performance. Some of the measurements we use are considered
non-GAAP financial measures under SEC rules and regulations. In
this press release, we present underwriting-related general and
administrative expenses, consolidated underwriting income (loss),
current accident year loss ratio, catastrophe and weather-related
losses ratio, current accident year loss ratio, excluding
catastrophe and weather-related losses, current accident year
combined ratio, current accident year combined ratio, excluding
catastrophe and weather-related losses, operating income (loss) (in
total and on a per share basis), annualized operating return on
average common equity ("operating ROACE"), amounts presented on a
constant currency basis and pre-tax total return on cash and
investments excluding foreign exchange movements which are non-GAAP
financial measures as defined in SEC Regulation G. We believe that
these non-GAAP financial measures, which may be defined and
calculated differently by other companies, help explain and enhance
the understanding of our results of operations. However, these
measures should not be viewed as a substitute for those determined
in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP").
Underwriting-Related General and
Administrative Expenses Underwriting-related general and
administrative expenses include those general and administrative
expenses that are incremental and/or directly attributable to our
underwriting operations. While this measure is presented in the
'Segment Information' note to our Consolidated Financial
Statements, it is considered a non-GAAP financial measure when
presented elsewhere on a consolidated basis.
Corporate expenses include holding company costs necessary to
support our worldwide insurance and reinsurance operations and
costs associated with operating as a publicly-traded company. As
these costs are not incremental and/or directly attributable to our
underwriting operations, these costs are excluded from
underwriting-related general and administrative expenses, and
therefore, consolidated underwriting income (loss). General and
administrative expenses, the most comparable GAAP financial measure
to underwriting-related general and administrative expenses, also
includes corporate expenses.
The reconciliation of underwriting-related general and
administrative expenses to general and administrative expenses, the
most comparable GAAP financial measure, is presented in the
'Consolidated Segmental Data' section of this press release.
Consolidated Underwriting Income
(Loss) Consolidated underwriting income (loss) is a pre-tax
measure of underwriting profitability that takes into account net
premiums earned and other insurance related income (loss) as
revenues and net losses and loss expenses, acquisition costs and
underwriting-related general and administrative expenses as
expenses. While this measure is presented in the 'Segment
Information' note to our Consolidated Financial Statements, it is
considered a non-GAAP financial measure when presented elsewhere on
a consolidated basis.
We evaluate our underwriting results separately from the
performance of our investment portfolio. As a result, we believe it
is appropriate to exclude net investment income and net investment
gains (losses) from our underwriting profitability measure.
Foreign exchange losses (gains) in our consolidated statements
of operations primarily relate to the impact of foreign exchange
rate movements on our net insurance-related liabilities. However,
we manage our investment portfolio in such a way that unrealized
and realized foreign exchange losses (gains) on our investment
portfolio, including unrealized foreign exchange losses (gains) on
our equity securities, and foreign exchange losses (gains) realized
on the sale of our available for sale investments and equity
securities recognized in net investment gains (losses), and
unrealized foreign exchange losses (gains) on our available for
sale investments in other comprehensive income (loss), generally
offset a large portion of the foreign exchange losses (gains)
arising from our underwriting portfolio, thereby minimizing the
impact of foreign exchange rate movements on total shareholders'
equity. As a result, we believe that foreign exchange losses
(gains) in our consolidated statements of operations in isolation
are not a meaningful contributor to our underwriting performance.
Therefore, foreign exchange losses (gains) are excluded from
consolidated underwriting income (loss).
Interest expense and financing costs primarily relate to
interest payable on our debt and Federal Home Loan Bank advances.
As these expenses are not incremental and/or directly attributable
to our underwriting operations, these expenses are excluded from
underwriting-related general and administrative expenses, and
therefore, consolidated underwriting income (loss).
Reorganization expenses in 2024 primarily related to severance
costs attributable to our "How We Work" program which is focused on
simplifying our operating structure. Reorganization expenses in
2023 primarily related to impairments of computer software assets
and severance costs attributable to our "How We Work" program.
Reorganization expenses are primarily driven by business decisions,
the nature and timing of which are not related to the underwriting
process. Therefore, these expenses are excluded from consolidated
underwriting income (loss).
Amortization of intangible assets arose from business decisions,
the nature and timing of which are not related to the underwriting
process. Therefore, these expenses are excluded from consolidated
underwriting income (loss).
We believe that the presentation of underwriting-related general
and administrative expenses and consolidated underwriting income
(loss) provides investors with an enhanced understanding of our
results of operations by highlighting the underlying pre-tax
profitability of our underwriting activities. The reconciliation of
consolidated underwriting income (loss) to net income (loss), the
most comparable GAAP financial measure, is presented in the
'Consolidated Segmental Data' section of this press release.
Current Accident Year Loss Ratio
Current accident year loss ratio represents net losses and loss
expenses ratio exclusive of net favorable (adverse) prior year
reserve development. We believe that the presentation of current
accident year loss ratio provides investors with an enhanced
understanding of our results of operations by highlighting net
losses and loss expenses associated with our underwriting
activities excluding the impact of volatile prior year reserve
development. The reconciliation of current accident year loss ratio
to net losses and loss expenses ratio, the most comparable GAAP
financial measure, is presented in the 'Consolidated Underwriting
Highlights' section of this press release.
Catastrophe and Weather-Related Losses
Ratio and Current Accident Year Loss
Ratio, excluding Catastrophe and Weather-Related Losses
Catastrophe and weather-related losses ratio represents net losses
and loss expenses ratio associated with natural disasters, man-made
catastrophes, other catastrophe events and other weather-related
events exclusive of net favorable (adverse) prior year reserve
development.
Current accident year loss ratio, excluding catastrophe and
weather-related losses represents net losses and loss expenses
ratio exclusive of net favorable (adverse) prior year reserve
development and net losses and loss expenses associated with
natural disasters, man-made catastrophes, other catastrophe events
and other weather-related events.
We believe that the presentation of these ratios that separately
identify net losses and loss expenses associated with catastrophe
and weather-related events provide investors with an enhanced
understanding of our results of operations due to the inherently
unpredictable nature of the occurrence of these events, the
potential magnitude of these losses and the complexity that affects
our ability to accurately estimate ultimate losses associated with
these events.
The reconciliation of catastrophe and weather-related losses
ratio and current accident year loss ratio, excluding catastrophe
and weather-related losses to net losses and loss expenses ratio,
the most comparable GAAP financial measure, is presented in the
'Consolidated Underwriting Highlights' section of this press
release.
Current Accident Year Combined
Ratio Current accident year combined ratio represents
underwriting results exclusive of net favorable (adverse) prior
year reserve development. We believe that the presentation of
current accident year combined ratio provides investors with an
enhanced understanding of our results of operations by highlighting
the profitability of our underwriting activities excluding the
impact of volatile prior year reserve development. The
reconciliation of current accident year combined ratio to combined
ratio, the most comparable GAAP financial measure, is presented in
the 'Consolidated Underwriting Highlights' section of this press
release.
Current Accident Year Combined Ratio,
excluding Catastrophe and Weather-Related Losses Current
accident year combined ratio, excluding catastrophe and
weather-related losses represents underwriting results exclusive of
net favorable (adverse) prior year reserve development and net
losses and loss expenses associated with natural disasters,
man-made catastrophes, other catastrophe events and other
weather-related events.
We believe that the presentation of current accident year
combined ratio, excluding catastrophe and weather-related losses
provides investors with an enhanced understanding of our results of
operations by highlighting the profitability of our underwriting
activities excluding the impact of volatile prior year reserve
development and by separately identifying net losses and loss
expenses associated with catastrophe and weather-related events due
to the inherently unpredictable nature of the occurrence of these
events, the potential magnitude of these losses and the complexity
that affects our ability to accurately estimate ultimate losses
associated with these events.
The reconciliation of current accident year combined ratio,
excluding catastrophe and weather-related losses to combined ratio,
the most comparable GAAP financial measure, is presented in the
'Consolidated Underwriting Highlights' section of this press
release.
Operating Income (Loss) Operating
income (loss) represents after-tax operational results exclusive of
net investment gains (losses), foreign exchange losses (gains),
reorganization expenses, interest in income (loss) of equity method
investments and Bermuda net deferred tax asset.
Although the investment of premiums to generate income and
investment gains (losses) is an integral part of our operations,
the determination to realize investment gains (losses) is
independent of the underwriting process and is heavily influenced
by the availability of market opportunities. Furthermore, many
users believe that the timing of the realization of investment
gains (losses) is somewhat opportunistic for many companies.
Foreign exchange losses (gains) in our consolidated statements
of operations primarily relate to the impact of foreign exchange
rate movements on net insurance-related liabilities. However, we
manage our investment portfolio in such a way that unrealized and
realized foreign exchange losses (gains) on our investment
portfolio, including unrealized foreign exchange losses (gains) on
our equity securities and foreign exchange losses (gains) realized
on the sale of our available for sale investments and equity
securities recognized in net investment gains (losses) and
unrealized foreign exchange losses (gains) on our available for
sale investments in other comprehensive income (loss), generally
offset a large portion of the foreign exchange losses (gains)
arising from our underwriting portfolio, thereby minimizing the
impact of foreign exchange rate movements on total shareholders'
equity. As a result, we believe that foreign exchange losses
(gains) in our consolidated statements of operations in isolation
are not a meaningful contributor to the performance of our
business. Therefore, foreign exchange losses (gains) are excluded
from operating income (loss).
Reorganization expenses in 2024 primarily related to severance
costs attributable to our "How We Work" program which is focused on
simplifying our operating structure. Reorganization expenses in
2023 primarily related to impairments of computer software assets
and severance costs attributable to our "How We Work" program.
Reorganization expenses are primarily driven by business decisions,
the nature and timing of which are not related to the underwriting
process. Therefore, these expenses are excluded from operating
income (loss).
Interest in income (loss) of equity method investments is
primarily driven by business decisions, the nature and timing of
which are not related to the underwriting process. Therefore, this
income (loss) is excluded from operating income (loss).
Bermuda net deferred tax asset is due to the recognition of
deferred tax assets net of deferred tax liabilities related to a
future Bermuda corporate income tax rate of 15%, pursuant to the
Corporate Income Tax Act 2023 effective for fiscal years beginning
on or after January 1, 2025. The Bermuda net deferred tax asset is
not related to the underwriting process. Therefore, this income is
excluded from operating income (loss).
Certain users of our financial statements evaluate performance
exclusive of after-tax net investment gains (losses), foreign
exchange losses (gains), reorganization expenses, interest in
income (loss) of equity method investments and Bermuda net deferred
tax asset in order to understand the profitability of recurring
sources of income.
We believe that showing net income (loss) available
(attributable) to common shareholders exclusive of after-tax net
investment gains (losses), foreign exchange losses (gains),
reorganization expenses, interest in income (loss) of equity method
investments and Bermuda net deferred tax asset reflects the
underlying fundamentals of our business. In addition, we believe
that this presentation enables investors and other users of our
financial information to analyze performance in a manner similar to
how our management analyzes the underlying business performance. We
also believe this measure follows industry practice and, therefore,
facilitates comparison of our performance with our peer group. We
believe that equity analysts and certain rating agencies that
follow us, and the insurance industry as a whole, generally exclude
these items from their analyses for the same reasons. The
reconciliation of operating income (loss) to net income (loss)
available (attributable) to common shareholders, the most
comparable GAAP financial measure, is presented in the 'Non-GAAP
Financial Measures Reconciliation' section of this press
release.
We also present operating income (loss) per diluted common share
and annualized operating ROACE, which are derived from the
operating income (loss) measure and are reconciled to the most
comparable GAAP financial measures, earnings (loss) per diluted
common share and annualized return on average common equity
("ROACE"), respectively, in the 'Non-GAAP Financial Measures
Reconciliation' section of this press release.
Constant Currency Basis We present
gross premiums written and net premiums written on a constant
currency basis in this press release. The amounts presented on a
constant currency basis are calculated by applying the average
foreign exchange rate from the current year to the prior year
amounts. We believe this presentation enables investors and other
users of our financial information to analyze growth in gross
premiums written and net premiums written on a constant basis. The
reconciliation to gross premiums written and net premiums written
on a GAAP basis is presented in the 'Insurance Segment' and
'Reinsurance Segment' sections of this press release.
Pre-Tax Total Return on Cash and
Investments excluding Foreign Exchange Movements Pre-tax
total return on cash and investments excluding foreign exchange
movements measures net investment income (loss), net investments
gains (losses), interest in income (loss) of equity method
investments, and change in unrealized gains (losses) generated by
average cash and investment balances. We believe this presentation
enables investors and other users of our financial information to
analyze the performance of our investment portfolio. The
reconciliation of pre-tax total return on cash and investments
excluding foreign exchange movements to pre-tax total return on
cash and investments, the most comparable GAAP financial measure,
is presented in the 'Investments' section of this press
release.
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version on businesswire.com: https://www.businesswire.com/news/home/20250129220571/en/
Cliff Gallant (Investor Contact): (415) 262-6843;
investorrelations@axiscapital.com
Nichola Liboro (Media Contact): (917) 705-4579;
nichola.liboro@axiscapital.com
Axis Capital (NYSE:AXS)
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