AXIS Capital (AXS) Q1 2025 Earnings Call May 01, 2025 08:30 AM ET Company Participants Cliff Gallant - Head of Investor Relations & Corporate DevelopmentVincent Tizzio - President & CEOPeter Vogt - CFOAndrew Kligerman - Managing DirectorHristian Getsov - VP - Equity Research (Insurance)Meyer Shields - Managing DirectorAndrew Andersen - Equity Research Vice PresidentCharlie Lederer - Vice President - Equity Research Conference Call Participants Josh Shanker - Analyst Operator Please note this event is being ...

Core Insights - Axis Capital reported revenue of $1.55 billion for the quarter ended March 2025, reflecting an 8.3% increase year-over-year, but fell short of the Zacks Consensus Estimate of $1.65 billion by -5.92% [1] - The company's EPS was $3.17, up from $2.57 in the same quarter last year, exceeding the consensus EPS estimate of $2.64 by +20.08% [1] Financial Performance Metrics - The combined ratio for insurance was 86.7%, slightly better than the estimated 86.9% [4] - The net loss and loss expense ratio totaled 58.6%, outperforming the estimated 61.1% [4] - The total combined ratio was 90.2%, compared to the average estimate of 93.5% [4] - The acquisition cost ratio for insurance was 19.2%, above the estimated 18.2% [4] - General and administrative expense ratio for total was 9.8%, significantly lower than the estimated 12.7% [4] - Net investment income reached $207.71 million, surpassing the average estimate of $188.03 million, marking a +24.1% year-over-year increase [4] - Net premiums earned were $1.34 billion, below the estimated $1.42 billion, but showed a +6.6% change year-over-year [4] - Other insurance-related income was $3.58 million, significantly lower than the estimated $7.17 million, representing a -57.1% year-over-year decline [4] - Net premiums earned in the insurance segment were $1.01 billion, slightly below the estimated $1.04 billion, with a +10% year-over-year change [4] - Net premiums earned in the reinsurance segment were $330.73 million, below the estimated $366.10 million, reflecting a -2.8% year-over-year change [4] Stock Performance - Axis Capital's shares have returned -3.7% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Axis Capital (AXS) came out with quarterly earnings of $3.17 per share, beating the Zacks Consensus Estimate of $2.64 per share. This compares to earnings of $2.57 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 20.08%. A quarter ago, it was expected that this insurance company would post earnings of $2.68 per share when it actually produced earnings of $2.97, delivering a surprise of 10.82%.Over the last four quarters, the co ...

Financial Performance - Net income available to common shareholders was $187 million, or $2.30 per common share, with operating income of $261 million, or $3.17 per diluted common share [222]. - Net income available to common shareholders decreased to $186,508 in Q1 2025 from $387,896 in Q1 2024, representing a decline of approximately 52% [319]. - Operating income increased to $261,469 in Q1 2025, up from $220,162 in Q1 2024, reflecting a growth of about 18.8% [319]. - Earnings per diluted common share fell to $2.26 in Q1 2025, down from $4.53 in Q1 2024, indicating a decrease of approximately 50% [319]. - The annualized return on average common equity (ROACE) decreased to 13.7% in Q1 2025 from 32.1% in Q1 2024 [304]. Premiums and Underwriting - Gross premiums written increased by 5% to $2.8 billion, while net premiums written rose by 2% to $1.8 billion, and net premiums earned grew by 7% to $1.3 billion [233]. - Underwriting income was reported at $163 million, with a combined ratio of 90.2% [222]. - The combined ratio improved slightly to 90.2% for the three months ended March 31, 2025, from 91.1% in 2024 [237]. - The current accident year loss ratio increased to 57.0% for the three months ended March 31, 2025, from 54.1% in 2024 [253]. - Catastrophe and weather-related losses for the three months ended March 31, 2025, were $47.5 million, or 4.7 points, compared to $19 million, or 2.1 points, in 2024 [254]. Investment Income - Net investment income increased by 24% to $208 million, while net investment losses were $30 million and foreign exchange losses totaled $57 million [233]. - Net investment income rose by $40 million, or 24%, to $207,713 million for the three months ended March 31, 2025, compared to $167,383 million in 2024 [281]. - Net investment losses for the three months ended March 31, 2025, were $30 million, compared to net investment losses of $9 million for the same period in 2024 [287]. - The net investment losses in Q1 2025 were primarily due to net realized losses on corporate debt and U.S. government securities, along with net unrealized losses on equity securities [288]. Shareholder Equity and Dividends - Book value per diluted common share increased to $66.48 in Q1 2025 from $57.13 in Q1 2024, reflecting a growth of 16.5% [304]. - Cash dividends declared per common share remained stable at $0.44 for both Q1 2025 and Q1 2024 [304]. - Common equity decreased by $187 million to $5.35 billion, with $465 million spent on repurchasing 5 million common shares during the quarter [366]. Cash and Investments - Total cash and investments amounted to $17.8 billion, with fixed maturities, short-term investments, and cash comprising 88% of this total [222]. - Total investments as of March 31, 2025, were valued at $14,525,725, down from $15,035,413 as of December 31, 2024, a decrease of about 3.4% [350]. - Cash and cash equivalents increased to $3,332,767 as of March 31, 2025, compared to $3,063,621 at December 31, 2024, reflecting an increase of approximately 8.8% [350]. - Fixed maturities, available for sale, decreased to $11,865,480 as of March 31, 2025, from $12,152,753 as of December 31, 2024, a decline of about 2.4% [350]. Foreign Currency Exposure - As of March 31, 2025, total net foreign currency exposure was $115 million, primarily influenced by euro, Australian dollar, Canadian dollar, and Japanese yen [376]. - The change in total net foreign currency exposure during the three months ended March 31, 2025, was mainly due to new business written in the period [376]. - The sensitivity analysis indicates significant exposure to fluctuations in foreign currencies, particularly in the euro and Australian dollar [375].

AXIS CAPITAL HOLDINGS LIMITED INVESTOR FINANCIAL SUPPLEMENT FIRST QUARTER 2025 AXIS Capital Holdings Limited 92 Pitts Bay Road Pembroke HM 08 Bermuda Contact Information: Cliff Gallant Investor Contact (415) 262-6843 investorrelations@axiscapital.com Website Information: www.axiscapital.com This report is for informational purposes only. It should be read in conjunction with the documents that the Company files with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securi ...

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Axis Capital (AXS) and Chubb (CB) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets ...

NEW YORK, April 8, 2025 /PRNewswire/ -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of Axsome Therapeutics, Inc. (NASDAQ: AXSM) breached their fiduciary duties to shareholders. According to a federal securities lawsuit, Insiders at Axsome caused the company to misrepresent or fail to disclose (i) Axsome's chemistry, manufacturing, and control ("CMC") practices were deficient with respect to AXS-07 and its manufacturing process; (ii) as a result ...

Core Viewpoint - AXIS Capital Holdings Limited (AXS) demonstrates strong investor confidence with its stock trading near a 52-week high, indicating potential for further price appreciation [1] Financial Performance - Earnings of AXIS Capital grew by 67.1% over the last five years, significantly outperforming the industry average of 19.3% [2] - The company has a solid surprise history, beating earnings estimates in three of the last four quarters with an average surprise of 9.17% [2] - AXIS Capital shares have gained 48.2% in the past year, outperforming the Finance sector and the Zacks S&P 500 composite, which grew by 15.5% and 9.1% respectively [3][4] Growth Projections - The Zacks Consensus Estimate for AXIS Capital's 2025 earnings per share indicates a year-over-year increase of 0.5%, with revenues projected at $6.76 billion, reflecting a 10.9% improvement [6] - For 2026, earnings per share and revenues are expected to increase by 10.4% and 6.3% respectively from the 2024 estimates [6] Return on Capital - Return on equity for AXIS Capital in the trailing 12 months was 18.5%, surpassing the industry average of 8.3% [7] - The return on invested capital (ROIC) was 11.2%, also better than the industry average of 6.3%, indicating efficient fund utilization [8] Strategic Focus - AXIS Capital aims to be a leading specialty underwriter, focusing on growth areas such as wholesale insurance and lower middle markets [9] - The company is positioned to benefit from a diversified portfolio of global specialty businesses and strong cycle management in its reinsurance business [10] Operational Efficiency - AXIS Capital is enhancing its digital capabilities to drive growth in smaller accounts and aims to achieve a general and administrative ratio of less than 11% by 2026 [11] Dividend History - AXIS Capital has a strong dividend track record, having increased its dividend for 18 consecutive years, currently yielding 1.86%, significantly above the industry average of 0.2% [12] Valuation - AXIS Capital shares are trading at a price-to-book multiple of 1.43, lower than the industry average of 1.64, presenting a favorable entry point for investors [13] Overall Assessment - AXIS Capital is repositioning its portfolio and enhancing efficiencies, with solid growth projections and attractive valuations, positioning the company for future growth [14][15]

Core Viewpoint - Axis Capital reported strong fourth-quarter earnings, surpassing estimates, driven by improved underwriting income and net investment income, despite higher expenses and a slight miss in total operating revenues [2][3][12]. Financial Performance - Fourth-quarter operating income was $2.97 per share, exceeding the Zacks Consensus Estimate by 10.8%, with a year-over-year increase of 1% [2]. - Total operating revenues reached $1.6 billion, missing estimates by 2.8%, but reflecting a 6.7% year-over-year growth [3][12]. - Net premiums written increased by 14% to $1.2 billion, with a 9% rise in the Insurance segment and a 64% surge in the Reinsurance segment [3]. Investment Income - Net investment income rose 5% year over year to $195.8 million, driven by fixed maturities portfolio income, despite lower returns on alternative investments [4]. Expense Analysis - Total expenses increased by 38.4% year over year to $1.2 billion, influenced by higher general and administrative expenses, acquisition costs, and foreign exchange gains [5]. Underwriting Performance - Underwriting income improved significantly to $129.5 million from a loss of $274 million in the previous year, with a combined ratio of 94.2%, improving by 3040 basis points [6]. Segment Results - In the Insurance segment, gross premiums written rose 7.4% to $1.7 billion, while net premiums earned increased by 11.9% to $1 billion [7]. - The Reinsurance segment saw gross premiums written increase by 36.9% to $275 million, with net premiums earned rising 0.7% to $351 million [9]. Full-Year Highlights - For the full year, total operating revenues were $6.1 billion, a 6.6% increase year over year, with net premiums written up 13% to $5.8 billion [12]. - Underwriting income for the year was $571.5 million, more than tripling year over year, with a combined ratio of 92.3%, improving by 760 basis points [12]. Financial Position - As of the end of 2024, Axis Capital had cash and cash equivalents of $2.1 billion, doubling from the previous year, with debt at $1.3 billion [13]. - Book value per share increased by 20.4% to $65.27 [13]. Capital Deployment - In 2024, Axis Capital returned $350 million to shareholders, including $200 million in share repurchases and $150 million in dividends [14]. Market Outlook - Recent estimates for Axis Capital have shown a downward trend, with a consensus estimate shift of -8.84% [15]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [17]. Industry Comparison - Axis Capital operates within the Zacks Insurance - Property and Casualty industry, where competitor W.R. Berkley reported a 4.8% gain over the past month and revenues of $3.51 billion, reflecting a year-over-year change of +9.2% [18].

Financial Performance - The company's total gross premiums written for 2024 reached $9,005,888, an increase of 7.8% from $8,356,525 in 2023 and 9.6% from $8,214,595 in 2022[41]. - The insurance segment gross premiums written amounted to $6,615,584 in 2024, up 7.8% from $6,140,764 in 2023 and 18.4% from $5,585,581 in 2022[41]. - The reinsurance segment gross premiums written were $2,390,304 in 2024, reflecting an increase of 7.9% from $2,215,761 in 2023 but a decrease of 9.1% from $2,629,014 in 2022[51]. Strategic Focus - The company aims to deliver sustained profitable growth and increased shareholder value through its focus on operating return on average common equity (operating ROACE) and adjusted book value per diluted common share (Adjusted DBVPS)[37]. - The company has exited the aviation and catastrophe lines of business, which were significant changes in its operational strategy[50]. - The competitive environment in the insurance segment emphasizes price, service, and distribution, with the company aiming for differentiation through underwriting expertise[46]. Risk Management - The company employs a comprehensive Enterprise Risk Management (ERM) framework to identify, assess, manage, monitor, and report risks affecting strategic, operational, and financial objectives[130]. - The internal capital model is utilized to measure internal risk capital and allocate capital to businesses that provide the best returns, ensuring alignment with the company's defined risk appetite[135]. - The company emphasizes risk diversification as a key component of its business model, aiming to maintain a balanced risk profile without disproportionately large risks[137]. - The risk appetite framework, authorized by the Board of Directors, defines the amount of risk the company is willing to accept in pursuit of strategic objectives, with specific limits established to manage individual risk types[138]. - The Risk Committee of the Board of Directors oversees the integrity and effectiveness of the ERM framework, ensuring that risk mitigation activities align with the company's overall risk strategy[142]. Regulatory Compliance - AXIS Specialty Bermuda is a Class 4 general business insurer licensed under the Insurance Act of Bermuda, incorporated on August 19, 2024[58]. - The Bermuda Monetary Authority (BMA) requires AXIS Capital to submit annual group statutory financial returns and maintain compliance with minimum capital requirements[62]. - The BMA published a revised Insurance Code of Conduct in August 2022, with compliance required by September 1, 2023[63]. - The U.S. Insurance Subsidiaries must file detailed quarterly statutory financial statements with state insurance regulators[70]. - The Dodd-Frank Act includes provisions that affect the insurance industry, particularly through the Federal Insurance Office's limited authority[72]. Operational Changes - AXIS Specialty Limited (Singapore Branch) ceased writing new business effective January 1, 2024, and plans to close the branch[65]. - AXIS Corporate Capital UK Limited ceased providing capital support to Syndicate 1686 on December 31, 2024[99]. - AXIS Corporate Capital UK II Limited provides 100% capital support to Syndicate 1686 effective January 1, 2025[100]. - AXIS Specialty Europe manages the Contessa book of business on a run-off basis following the dissolution of Contessa Limited on April 11, 2024[103]. Employee and Workforce Management - As of December 31, 2024, the company had 1,876 employees, reflecting an approximate 8% decrease in employee count during 2024, with a voluntary turnover rate of 11.9% compared to 10.9% in 2023[125]. - The company is committed to fair pay and conducts regular pay equity audits to ensure equal pay practices[123]. Investment Strategy - The company utilizes third-party investment managers for its investment portfolio, focusing on investment grade fixed maturities to match expected claim payouts[55]. - The company’s investment strategy is overseen by an Investment and Finance Committee, ensuring alignment with overall goals and risk management[55]. - Fixed maturities represent 84% of total investments and 70% of total cash and investments as of December 31, 2024, which may be adversely impacted by changes in interest rates or credit spreads[264]. Cybersecurity and Data Protection - The company is regularly targeted by cyberattacks, which include threats such as viruses, malware, and phishing attacks, necessitating continuous monitoring and enhancement of its cybersecurity measures[281]. - There is a risk of material adverse effects on the company's business and financial condition due to potential cybersecurity incidents, including unauthorized access and data breaches[284]. - The company operates under strict data protection and privacy laws, with non-compliance potentially leading to significant fines and reputational damage[288]. - Data protection laws in Europe, the U.K., and Switzerland impose obligations on companies processing data of citizens from these regions, regardless of the company's location[290]. - The evolving data protection landscape in the U.S. may increase the company's compliance burden as states implement new regulations[291]. Liquidity and Credit Risk - The company manages liquidity risk through a range of policies, primarily generating liquidity from premiums and investment income[193]. - The company maintains cash and cash equivalents and a high-quality, liquid investment portfolio to meet expected outflows, with limits on illiquid assets and a minimum percentage of unrestricted cash and liquid investment-grade fixed maturity securities[195]. - The company faces credit risk from third-party counterparties, including potential insolvency of reinsurers, which could materially affect its financial condition[272]. - The company’s exposure to liquidity risk stems mainly from the need to pay claims on potential extreme loss events and regulatory constraints[269]. - The company may experience losses from policyholders or intermediaries not paying premiums due to insolvency or adverse economic conditions, which could materially impact revenues[275]. Business Continuity and Operational Risks - The company has a robust business continuity plan to address risks from business interruptions and system failures, although it may still be inadequate[279]. - The company’s operational risk management includes a Risk Register to monitor key drivers of risk and a quarterly certification process for control owners[203]. - The company faces heightened operational risks due to changes in processes and systems as it adapts to new ways of working[278]. - The company outsources certain technology and business process functions, which may expose it to operational difficulties and data security risks if third-party providers do not perform satisfactorily[286].