Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-31721 AXIS CAPITAL HOLDINGS LIMITED (Exact name of registrant as specified in its charter) Bermuda (State or other jurisdiction of incorporation or organiza ...

Front Matter [Cover Page and Contact Information](index=1&type=section&id=Cover%20Page%20and%20Contact%20Information) This document is the Investor Financial Supplement for Q2 2025, providing contact details and directing to official company information - Report Title: **Investor Financial Supplement, Second Quarter 2025**[3](index=3&type=chunk) - Investor Contact: **Cliff Gallant**, investorrelations@axiscapital.com[4](index=4&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) The report is structured into six main sections covering financial highlights, statements, reserve analysis, share analysis, and non-GAAP measures - The report is organized into **six primary sections** covering key financial areas[6](index=6&type=chunk) Basis of Presentation [Company Structure and Forward-Looking Statements](index=4&type=section&id=Company%20Structure%20and%20Forward-Looking%20Statements) AXIS Capital operates with Insurance and Reinsurance segments, and the report contains forward-looking statements subject to various risks - The company's underwriting operations are organized into **two reportable segments**: Insurance and Reinsurance[8](index=8&type=chunk) - The document includes a safe harbor statement for forward-looking statements, cautioning that actual results may differ due to various risks[9](index=9&type=chunk)[11](index=11&type=chunk) - Key risks include the cyclical nature of the business, catastrophe losses, emerging claims, competition, and general economic conditions[14](index=14&type=chunk)[15](index=15&type=chunk) [Business Descriptions](index=6&type=section&id=Business%20Descriptions) This section details the lines of business for the Insurance and Reinsurance segments, including specialty products and treaty reinsurance, noting recent exits [Insurance Segment](index=6&type=section&id=Insurance%20Segment) The Insurance segment offers a diverse portfolio of specialty insurance products globally, including Professional Lines, Property, and Cyber - Offers a **diverse portfolio of specialty insurance products** worldwide[19](index=19&type=chunk) - Key lines of business include Professional Lines, Property, Liability, Cyber, Marine and Aviation, Accident and Health, and Credit and Political Risk[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Reinsurance Segment](index=7&type=section&id=Reinsurance%20Segment) The Reinsurance segment provides treaty reinsurance globally across various lines, having exited Catastrophe, Property, and Aviation reinsurance in recent years - Provides **treaty reinsurance** to insurers worldwide on both an excess of loss and proportional basis[27](index=27&type=chunk) - Key active lines include Liability, Accident and Health, Professional Lines, Credit and Surety, Motor, and Agriculture[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The company has ceased underwriting in several lines, notably **Catastrophe and Property reinsurance as of June 2022**, as part of its run-off strategy[34](index=34&type=chunk)[35](index=35&type=chunk) [I. Financial Highlights](index=8&type=section&id=I.%20Financial%20Highlights) AXIS Capital reported strong Q2 2025 growth, with gross premiums up 3.1%, net income up 5.6% to **$215.8 million**, and an improved combined ratio of **88.9%** Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Premiums Written (in thousands) | $2,515,971 | $2,440,236 | 3.1% | | Net Premiums Earned (in thousands) | $1,393,431 | $1,304,478 | 6.8% | | Net Income to Common Shareholders (in thousands) | $215,795 | $204,401 | 5.6% | | Operating Income (in thousands) | $261,304 | $249,989 | 4.5% | | Earnings per Diluted Share | $2.72 | $2.40 | 13.3% | | Operating Income per Diluted Share | $3.29 | $2.93 | 12.3% | | Combined Ratio | 88.9% | 90.4% | (1.5) pts | | Book Value per Diluted Share | $70.34 | $59.29 | 18.6% | Six Months Ended June 30, 2025 vs 2024 Key Financial Metrics | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Premiums Written (in thousands) | $5,310,622 | $5,094,663 | 4.2% | | Net Income to Common Shareholders (in thousands) | $402,302 | $592,300 | (32.1%) | | Operating Income (in thousands) | $523,118 | $470,154 | 11.3% | | Combined Ratio | 89.5% | 90.8% | (1.3) pts | - The year-to-date net income decrease of **32.1%** contrasts with the quarterly increase and **11.3% growth in YTD operating income**, suggesting non-operating items influenced prior year's results[38](index=38&type=chunk) [II. Income Statements](index=10&type=section&id=II.%20Income%20Statements) [a. Consolidated Statement of Operations](index=10&type=section&id=a.%20Consolidated%20Statement%20of%20Operations) Q2 2025 total revenues increased to **$1.63 billion**, with net income to common shareholders growing 5.6% to **$215.8 million**, despite significant foreign exchange losses Consolidated Statement of Operations Summary (Three Months Ended June 30) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Premiums Earned | $1,393,431 | $1,304,478 | | Total Revenues | $1,632,858 | $1,450,500 | | Net Losses and Loss Expenses | $801,754 | $765,988 | | Foreign Exchange Losses (Gains) | $94,885 | $(7,384) | | Total Expenses | $1,352,596 | $1,205,889 | | Net Income | $223,358 | $211,964 | | Net Income Available to Common Shareholders | $215,795 | $204,401 | Consolidated Statement of Operations Summary (Six Months Ended June 30) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Premiums Earned | $2,734,251 | $2,562,519 | | Total Revenues | $3,154,962 | $2,875,057 | | Income Tax (Expense) Benefit | $(100,521) | $84,107 | | Net Income | $417,427 | $607,425 | | Net Income Available to Common Shareholders | $402,302 | $592,300 | - The combined ratio improved to **88.9%** in Q2 2025 from **90.4%** in Q2 2024, indicating better underwriting profitability[49](index=49&type=chunk) [b. Consolidated Segment Data](index=15&type=section&id=b.%20Consolidated%20Segment%20Data) In Q2 2025, the Insurance segment led profitability with **$151.6 million** underwriting income and an **85.3%** combined ratio, outperforming Reinsurance Segment Performance (Three Months Ended June 30, 2025) | Segment | Gross Premiums Written (in thousands) | Net Premiums Earned (in thousands) | Underwriting Income (in thousands) | Combined Ratio | | :--- | :--- | :--- | :--- | :--- | | Insurance | $1,932,435 | $1,032,961 | $151,639 | 85.3% | | Reinsurance | $583,536 | $360,470 | $37,562 | 92.0% | | **Total** | **$2,515,971** | **$1,393,431** | **$189,201** | **88.9%** | - Both segments reported net favorable prior year reserve development, totaling **$20.2 million** for the quarter[59](index=59&type=chunk) [c. Gross Premiums Written by Segment by Line of Business](index=16&type=section&id=c.%20Gross%20Premiums%20Written%20by%20Segment%20by%20Line%20of%20Business) YTD June 2025 GPW for Insurance was led by Property and Liability, while Reinsurance was driven by Liability and Professional Lines, with continued management of run-off lines Top 3 Insurance Lines by GPW (Six Months Ended June 30, 2025) | Line of Business | Gross Premiums Written (in thousands) | | :--- | :--- | | Property | $1,140,894 | | Liability | $669,300 | | Professional Lines | $600,529 | Top 3 Reinsurance Lines by GPW (Six Months Ended June 30, 2025) | Line of Business | Gross Premiums Written (in thousands) | | :--- | :--- | | Liability | $421,637 | | Professional Lines | $360,296 | | Credit and Surety | $320,956 | [d. Consolidated Data](index=17&type=section&id=d.%20Consolidated%20Data) Consolidated underwriting performance shows a Q2 2025 combined ratio of **88.9%**, an improvement driven by a lower net losses ratio and favorable prior year reserve development Consolidated Ratio Trends (Quarterly) | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Losses and Loss Expenses Ratio | 57.5% | 58.6% | 58.7% | | Acquisition Cost Ratio | 19.8% | 19.7% | 20.3% | | General and Administrative Expenses Ratio | 11.6% | 11.9% | 11.4% | | **Combined Ratio** | **88.9%** | **90.2%** | **90.4%** | - The company reported net favorable prior year reserve development of **$20.2 million** in Q2 2025, contributing to the improved loss ratio[62](index=62&type=chunk) [e. Segment Data](index=18&type=section&id=e.%20Segment%20Data) Quarterly segment data shows the Insurance segment's strong performance with an **85.3%** combined ratio, while Reinsurance deteriorated to **92.0%** due to a higher loss ratio [Insurance Segment Data](index=18&type=section&id=Insurance%20Segment%20Data) The Insurance segment's Q2 2025 underwriting income rose to **$151.6 million**, with the combined ratio improving to **85.3%** due to lower loss and acquisition costs Insurance Segment Key Ratios (Q2 2025 vs Q2 2024) | Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Losses and Loss Expenses Ratio | 54.4% | 56.6% | | Acquisition Cost Ratio | 18.9% | 19.6% | | Combined Ratio | 85.3% | 87.9% | - The segment recorded **$36.4 million** in catastrophe and weather-related losses and **$15.2 million** in net favorable prior year reserve development in Q2 2025[65](index=65&type=chunk) [Reinsurance Segment Data](index=19&type=section&id=Reinsurance%20Segment%20Data) The Reinsurance segment's Q2 2025 underwriting income decreased to **$37.6 million**, with the combined ratio deteriorating to **92.0%** due to a higher net losses ratio Reinsurance Segment Key Ratios (Q2 2025 vs Q2 2024) | Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Losses and Loss Expenses Ratio | 66.6% | 64.5% | | Acquisition Cost Ratio | 22.5% | 22.3% | | Combined Ratio | 92.0% | 89.3% | - The segment recorded minimal catastrophe losses (**$0.2 million**) and **$5.0 million** in net favorable prior year reserve development in Q2 2025[67](index=67&type=chunk) [f. Net Investment Income](index=20&type=section&id=f.%20Net%20Investment%20Income) Q2 2025 net investment income was **$187.3 million**, slightly down from Q2 2024, primarily from fixed maturities, but YTD income grew **10.2%** to **$395.0 million** Components of Net Investment Income (Q2 2025) | Source | Income (in thousands) | | :--- | :--- | | Fixed maturities | $149,861 | | Other investments | $18,479 | | Cash and cash equivalents | $16,649 | | Mortgage loans | $5,956 | | Equity securities | $3,155 | | **Total Net Investment Income** | **$187,297** | - Year-to-date net investment income grew to **$395.0 million** in 2025 from **$358.4 million** in 2024, reflecting a stronger investment environment[69](index=69&type=chunk) [III. Balance Sheets](index=21&type=section&id=III.%20Balance%20Sheets) [a. Consolidated Balance Sheets](index=21&type=section&id=a.%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$34.2 billion**, shareholders' equity grew to **$6.2 billion**, and the debt-to-total-capital ratio improved to **17.6%** Key Balance Sheet Items (as of June 30) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Investments | $14,806,930 | $15,545,508 | | Total Assets | $34,151,036 | $32,078,882 | | Reserve for Losses and Loss Expenses | $17,879,023 | $16,738,871 | | Total Liabilities | $27,976,638 | $26,419,411 | | Total Shareholders' Equity | $6,174,398 | $5,659,471 | - The debt-to-total capital ratio improved to **17.6%** at the end of Q2 2025, down from **18.8%** a year ago, indicating a stronger leverage profile[71](index=71&type=chunk) [b. Cash and Invested Assets](index=22&type=section&id=b.%20Cash%20and%20Invested%20Assets) As of June 30, 2025, cash and invested assets totaled **$16.3 billion**, with **80.9%** in fixed maturities and equity securities, and an average credit quality of A+ [Cash and Invested Assets Portfolio](index=22&type=section&id=Cash%20and%20Invested%20Assets%20Portfolio) As of June 30, 2025, total cash and invested assets were **$16.3 billion**, dominated by fixed maturities available for sale at **$12.1 billion** Invested Asset Portfolio Composition (June 30, 2025) | Asset Class | Fair Value (in thousands) | Percentage | | :--- | :--- | :--- | | Fixed Maturities, available for sale | $12,137,475 | 74.6% | | Cash and cash equivalents | $1,409,201 | 8.7% | | Other investments | $938,922 | 5.8% | | Equity securities | $619,275 | 3.8% | | **Total Cash and Invested Assets** | **$16,274,059** | **100.0%** | [Cash and Invested Assets Composition](index=23&type=section&id=Cash%20and%20Invested%20Assets%20Composition) The investment portfolio is highly allocated to investment-grade fixed maturities with an average credit quality of **A+** and a book yield of **4.6%** - The average credit quality of the fixed maturities portfolio is **A+**[77](index=77&type=chunk) - The book yield of fixed maturities has risen to **4.6%** in Q2 2025, compared to **4.4%** in Q2 2024[77](index=77&type=chunk) - The average duration of the fixed maturities portfolio is **3.1 years**[77](index=77&type=chunk) [Mortgage-Backed and Asset-Backed Securities Composition](index=24&type=section&id=Mortgage-Backed%20and%20Asset-Backed%20Securities%20Composition) The **$4.1 billion** MBS and ABS portfolio is primarily high-quality, with **93.3%** in Agency or AAA-rated securities and minimal non-investment grade holdings - The MBS and ABS portfolio is heavily weighted towards high credit quality, with **93.3%** in Agency or AAA-rated securities[79](index=79&type=chunk) [IV. Losses Reserve Analysis](index=25&type=section&id=IV.%20Losses%20Reserve%20Analysis) [a. Paid to Incurred Analysis](index=25&type=section&id=a.%20Paid%20to%20Incurred%20Analysis) Q2 2025 net loss reserve was **$8.8 billion**, with a **$2.0 billion** LPT reinsurance agreement reducing exposure to prior-year development - On April 24, 2025, the company completed a **loss portfolio transfer (LPT)** with Cavello Bay Reinsurance Limited (Enstar)[81](index=81&type=chunk) - The LPT transaction increased reinsurance recoverable on unpaid losses by **$2.0 billion**, covering business predominantly from 2021 and prior underwriting years[81](index=81&type=chunk) - At June 30, 2025, reserves for losses incurred but not reported (IBNR) were **$12.2 billion**, representing **68%** of the total gross reserve[82](index=82&type=chunk) [b. Paid to Incurred Analysis by Segment](index=26&type=section&id=b.%20Paid%20to%20Incurred%20Analysis%20by%20Segment) Q2 2025 saw **$20.2 million** in total net favorable prior year reserve development, with Insurance at **$15.2 million** and Reinsurance at **$5.0 million** Net Favorable Prior Year Reserve Development (Q2 2025) | Segment | Development (in thousands) | | :--- | :--- | | Insurance | $15,216 | | Reinsurance | $5,013 | | **Total** | **$20,229** | Net Paid to Incurred Loss Ratio (Q2 2025) | Segment | Ratio | | :--- | :--- | | Insurance | 89.3% | | Reinsurance | 121.7% | | **Total** | **99.0%** | [V. Share Analysis](index=27&type=section&id=V.%20Share%20Analysis) [a. Earnings Per Common Share Information](index=27&type=section&id=a.%20Earnings%20Per%20Common%20Share%20Information) Q2 2025 diluted EPS increased **13.3%** to **$2.72**, driven by a **7.0%** reduction in weighted average diluted common shares outstanding due to repurchases Earnings Per Share (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income Available to Common Shareholders (in thousands) | $215,795 | $204,401 | | Weighted Average Diluted Shares (in thousands) | 79,329 | 85,326 | | Earnings per Diluted Common Share | $2.72 | $2.40 | - The company repurchased **510,000 common shares** in Q2 2025, contributing to the reduction in share count and the increase in EPS[87](index=87&type=chunk) [b. Book Value Per Diluted Common Share and Tangible Book Value Per Diluted Common Share - Treasury Stock Method](index=28&type=section&id=b.%20Book%20Value%20Per%20Diluted%20Common%20Share%20and%20Tangible%20Book%20Value%20Per%20Diluted%20Common%20Share%20-%20Treasury%20Stock%20Method) As of June 30, 2025, book value per diluted common share grew **18.6%** to **$70.34**, and tangible book value increased **20.1%** to **$67.95** Book Value Growth (as of June 30) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Book Value per Diluted Common Share | $70.34 | $59.29 | +18.6% | | Tangible Book Value per Diluted Common Share | $67.95 | $56.59 | +20.1% | - The calculation for book value per diluted common share includes **1.78 million dilutive restricted stock units** as of Q2 2025[89](index=89&type=chunk) [VI. Non-GAAP Financial Measures](index=29&type=section&id=VI.%20Non-GAAP%20Financial%20Measures) [a. Operating Income and Operating Return on Average Common Equity](index=29&type=section&id=a.%20Operating%20Income%20and%20Operating%20Return%20on%20Average%20Common%20Equity) Q2 2025 operating income was **$261.3 million**, reconciled from GAAP net income by excluding investment gains and foreign exchange losses, yielding **$3.29** operating EPS and **19.0%** annualized operating ROACE Reconciliation of Net Income to Operating Income (Q2 2025) | (in thousands) | Amount | | :--- | :--- | | Net income available to common shareholders | $215,795 | | Net investment (gains) losses | $(43,468) | | Foreign exchange losses (gains) | $94,885 | | Other adjustments | $(5,905) | | **Operating income** | **$261,304** | GAAP vs. Non-GAAP Performance Metrics (Q2 2025) | Metric | GAAP | Non-GAAP (Operating) | | :--- | :--- | :--- | | Income per Diluted Share | $2.72 | $3.29 | | Annualized ROACE | 15.7% | 19.0% | [b. Rationale for the Use of Non-GAAP Financial Measures](index=30&type=section&id=b.%20Rationale%20for%20the%20Use%20of%20Non-GAAP%20Financial%20Measures) AXIS Capital uses non-GAAP measures like operating income and tangible book value to provide a clearer understanding of core operational performance by excluding volatile, non-recurring items - The company presents non-GAAP measures to enhance the understanding of its results of operations by focusing on **core underwriting profitability**[95](index=95&type=chunk) - Operating Income excludes items like net investment gains/losses and foreign exchange movements, which management believes are not representative of recurring operational performance[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Tangible Book Value is presented to help assess the value generated for shareholders, exclusive of goodwill and intangible assets from acquisitions[121](index=121&type=chunk)

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Wall Street expects a year-over-year decline in earnings on higher revenues when Axis Capital (AXS) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 29. On th ...

Core Insights - Axis Capital has consistently beaten earnings estimates, with an average surprise of 15.45% over the last two quarters [1][2] - The company reported earnings of $2.64 per share for the most recent quarter, missing the expectation of $3.17 per share by 20.08% [2] - For the previous quarter, Axis Capital exceeded the consensus estimate of $2.68 per share by reporting $2.97 per share, resulting in a surprise of 10.82% [2] Earnings Estimates and Predictions - Recent estimates for Axis Capital have been increasing, indicating a positive outlook for future earnings [5] - The Zacks Earnings ESP for Axis Capital is currently +0.52%, suggesting analysts are optimistic about the company's near-term earnings potential [8] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] Earnings Release Information - The next earnings report for Axis Capital is expected to be released on July 29, 2025 [8] - The Earnings ESP metric is crucial for predicting earnings surprises, as it compares the Most Accurate Estimate to the Zacks Consensus Estimate [7][9] - A negative Earnings ESP does not necessarily indicate an earnings miss, but it reduces predictive power [9]

Core Insights - AXIS Capital Holdings Limited (AXS) shares have increased by 48% over the past year, outperforming the Finance sector and the S&P 500 composite, which grew by 18.4% and 9.4% respectively [1] - The company has a market capitalization of $8.13 billion and an average trading volume of 0.7 million shares over the last three months [1] Performance Metrics - AXS has consistently beaten earnings estimates in the last four quarters, with an average beat of 13.89% [3] - The Zacks Consensus Estimate for AXS's 2025 earnings per share indicates a 3.4% year-over-year increase, with revenues expected to reach $6.58 billion, reflecting a 7.8% improvement [12] - Earnings have grown by 67.1% over the past five years, significantly higher than the industry average of 20.8% [13] Valuation and Price Movement - AXS shares are trading at a forward price-to-book value of 1.51X, lower than the industry average of 1.56X and the Finance sector's 4.11X [4] - The stock closed at $103.42, near its 52-week high of $107.19, indicating strong investor confidence [5] - The average price target from analysts is $112.38 per share, suggesting a potential upside of 9.1% from the last closing price [16] Strategic Focus and Growth Areas - AXS is focusing on growth areas such as wholesale insurance, lower middle markets, and specialty reinsurance lines [8] - The company aims to reduce its general and administrative expense ratio to below 11% by 2026 [8] - AXS is enhancing its digital capabilities to drive growth in smaller accounts and improve operational efficiencies [21] Dividend and Return Metrics - AXS has a strong dividend history, having increased its dividend for 18 consecutive years, currently yielding 1.7%, significantly above the industry average of 0.2% [22] - The return on equity for AXS in the trailing 12 months was 19%, outperforming the industry average of 7.8% [18] Analyst Sentiment - Analysts have raised their earnings estimates for AXS for both 2025 and 2026, with the consensus estimates increasing by 2.4% and 0.5% respectively over the past 60 days [14]

Financial Performance Highlights - The company achieved an all-time high quarterly operating EPS of $3.17[47] - The annualized operating return on average common equity (ROACE) reached 19.2%[13, 35, 48] - The diluted book value per share hit a record of $66.48, marking a 16.4% increase over the past 12 months[48] - The company executed $440 million in share repurchases during the first quarter of 2025[19, 44, 47] Underwriting Performance - The current accident year combined ratio, excluding catastrophes and weather, improved to 87.9%, a 1.7 percentage point improvement year-over-year[48] - The insurance segment's gross premiums written (GPW) reached $1.7 billion, a 5% increase year-over-year, representing the highest first-quarter volume for the segment[33, 47] - Reinsurance segment GPW increased by 5% year-over-year to $1.1 billion, driven by new business in Professional Lines and Credit & Surety lines[33] Strategic Focus and Portfolio - The company's total capital stands at $7.2 billion, with a debt-to-total capital ratio of 18.2%[13] - The company's gross premiums written (GPW) is $9.1 billion[13, 22] - The company aims for a G&A ratio of less than 11% by 2026 through the "How We Work" program[38]

Group 1 - The article focuses on the undervalued preferred shares of AXIS Capital Holdings Limited (NYSE: AXS) and analyzes their yield spread, which has widened significantly compared to similar instruments [1] - The investment group Trade With Beta, led by Denislav, provides features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1] - The article expresses a beneficial long position in the shares of AXS.PR.E, indicating a personal investment interest by the author [1]

Industry Overview - The Zacks Property and Casualty (P&C) Insurance industry is experiencing growth due to solid retention, exposure growth across business lines, and improved pricing, which are driving higher premiums and maintaining profitability [1] - The industry is focusing on personalized offerings to enhance customer experience and is leveraging digitalization [1] - Catastrophic activities, both natural and man-made, may have negatively impacted underwriting profit [1] Company Analysis: Axis Capital Holdings Limited (AXS) - AXS has seen an increase in its top line driven by higher net premiums earned and net investment income [4] - The Insurance segment is performing well, contributing to improved premiums, with favorable market conditions expected to continue across property lines [5] - AXS is focused on growth in Marine Cargo, Cyber, and Renewable Energy, with a return on equity (ROE) of 19%, significantly above the industry average of 7.8% [6] - The company’s net investment income has shown a four-year CAGR of 21.4%, supported by increased fixed maturity assets and yields [7] - AXS has a strong track record of shareholder value enhancement through stock buybacks and consecutive dividend increases, with a ten-year CAGR of 4.2% [8] Company Analysis: Arch Capital Group Ltd. (ACGL) - ACGL focuses on writing specialty lines of insurance and reinsurance, maintaining a strong track record of net premiums written with a four-year CAGR of 20.6% [9][10] - The company expects continued growth in its Insurance and Reinsurance segments due to rate increases and new business opportunities [11] - ACGL has seen a four-year CAGR of 30.2% in net investment income, benefiting from rising investment yields and a growing investment portfolio [12] - The company maintains a robust capital position and has improved its balance sheet, with a return on equity of 15.7%, also above the industry average [13] Financial Estimates - The Zacks Consensus Estimate for AXS' 2025 revenues and EPS indicates a year-over-year increase of 7.8% and 3.4%, respectively [14] - For ACGL, the 2025 revenue estimate suggests a year-over-year increase of 13.5%, while EPS is projected to decline by 14.7% [15] Valuation Metrics - AXS is trading at a price-to-book multiple of 1.49, above its five-year median of 1.06, while ACGL's price-to-book multiple is at 1.69, above its median of 1.64 [16] Conclusion - AXS is well-positioned for growth in its Specialty Insurance and Reinsurance business, particularly in Marine Cargo, Cyber, and Renewable Energy [17] - ACGL is set to benefit from specialty lines of insurance and reinsurance, with growth driven by rate increases and a growing investment portfolio [17] - AXS has a solid dividend yield of 1.7%, significantly higher than the industry average of 0.2%, making it attractive for yield-seeking investors [18] - AXS has outperformed the industry with a year-to-date gain of 14.5%, while ACGL has gained only 0.7% [20]

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 and solid upward momentum [1][6]. Financial Performance - Earnings of AXIS Capital grew by 67.1% over the last five years, significantly outperforming the industry average of 18.9% [2]. - The company has consistently beaten earnings estimates, with an average surprise of 13.89% over the last four quarters [2]. - The market capitalization of AXIS Capital is $7.90 billion, with an average trading volume of 0.7 million shares over the last three months [5]. Stock Performance - AXIS Capital shares have increased by 42.7% in the past year, outperforming the Finance sector and the Zacks S&P 500 composite, which grew by 15.1% and 7.7%, respectively [6]. Growth Projections - The Zacks Consensus Estimate for AXIS Capital's 2025 earnings per share indicates a year-over-year increase of 3.1%, with revenues projected to reach $6.66 billion, reflecting a 9.2% improvement [9]. - For 2026, earnings per share and revenues are expected to increase by 8.8% and 7%, respectively, compared to 2025 estimates [9]. Analyst Sentiment - Analysts have raised their estimates for AXIS Capital's earnings for 2025 by 2.5% and for 2026 by 0.8% over the past 30 days, indicating positive sentiment [10]. Return on Capital - The return on equity for AXIS Capital in the trailing 12 months was 19%, significantly higher than the industry average of 7.7%, showcasing efficient use of shareholders' funds [11]. - The return on invested capital (ROIC) was 11.7%, also exceeding the industry average of 5.9%, reflecting effective capital utilization [12]. Strategic Focus - AXIS Capital aims to be a leading specialty underwriter, focusing on growth areas such as wholesale insurance and lower middle markets, while managing risk exposure [13]. - The company is enhancing its digital capabilities and simplifying its operating structure to achieve a general and administrative ratio of less than 11% by 2026 [15]. Dividend History - AXIS Capital has a strong dividend track record, having increased its dividend for 18 consecutive years, currently yielding 1.75%, well above the industry average of 0.2% [16]. Valuation - AXIS Capital shares are trading at a price-to-book multiple of 1.48, lower than the industry average of 1.52, indicating a favorable entry point for investors [17]. Conclusion - AXIS Capital is well-positioned for growth through prudent resource deployment, improved portfolio mix, and enhanced underwriting profitability, supported by a favorable dividend history and solid growth projections [19][21].