AXIS Capital(US:AXS)2023-11-01 16:00Financial Performance - Net income available to common shareholders for Q3 2023 was $181 million, or $2.12 per common share[245]. - Net income attributable to common shareholders for Q3 2023 was $180.535 million, a significant increase from a loss of $16.947 million in Q3 2022[351]. - Earnings per diluted common share for Q3 2023 was $2.10, a recovery from a loss of $0.20 per share in Q3 2022[351]. - Operating income for the nine months ended September 30, 2023, reached $593.122 million, compared to $331.323 million for the same period in 2022, reflecting an increase of 78.9%[351]. - The annualized return on average common equity for Q3 2023 was 16.1%, a significant improvement from a negative return of 1.7% in Q3 2022[351]. Premiums and Underwriting - Gross premiums written totaled $1.9 billion, with net premiums earned at $1.3 billion[245]. - Gross premiums written increased by 12% to $1,905,878 for the three months ended September 30, 2023, compared to $1,707,808 in 2022[268]. - Net premiums written decreased by 6% to $975,357 for the three months ended September 30, 2023, down from $1,036,784 in 2022[268]. - Underwriting income reached $147 million, resulting in a combined ratio of 92.7%[246]. - The combined ratio improved to 92.7% for the three months ended September 30, 2023, down from 104.3% in 2022[270]. Loss Ratios and Catastrophe Losses - The company reported pre-tax catastrophe and weather-related losses of $42 million, primarily due to the Maui wildfires and Hurricane Idalia[245]. - The current accident year loss ratio, excluding catastrophe and weather-related losses, decreased to 56.3% for the three months ended September 30, 2023, from 57.1% in 2022[270]. - Catastrophe and weather-related losses for the three months ended September 30, 2023, were $37 million, or 4.2 points, compared to $113 million, or 14.1 points, in the same period of 2022[283]. - The current accident year loss ratio decreased to 67.2% for the three months ended September 30, 2023, from 84.5% for the same period in 2022, primarily due to lower catastrophe and weather-related losses of $5 million compared to $99 million in 2022[310]. Investment Income and Expenses - Net investment income surged by 75% to $154,201 for the three months ended September 30, 2023, compared to $88,177 in 2022[268]. - Net investment losses for the three months ended September 30, 2023, were $53 million, a significant reduction from $146 million in 2022, primarily due to net realized losses on U.S. government and corporate debt securities[327]. - The underwriting-related general and administrative expense ratio decreased to 4.2% for the three months ended September 30, 2023, from 4.9% in 2022, mainly due to reduced personnel costs[317]. - Corporate expenses increased by 58% to $40,682 million for the three months ended September 30, 2023, from $25,675 million in 2022[333]. Capital Structure and Debt - The debt to total capital ratio stood at 20.7%, with total debt of $1.3 billion[247]. - The debt to total capital ratio improved to 20.7% from 22.0%, indicating a stronger capital structure[380]. - The company had $86 million of borrowings under the Federal Home Loan Bank program, with interest rates between 5.5% and 5.7%[381]. Shareholder Returns - Cash dividends declared per common share were $0.44 for the three months ended September 30, 2023, compared to $0.43 in 2022[342]. - The average common shareholders' equity increased to $4.477 billion in Q3 2023 from $3.973 billion in Q3 2022, reflecting a growth of 12.6%[351]. - The company repurchased 289,000 common shares for a total cost of $17 million during the nine months ended September 30, 2023[384]. Strategic Initiatives - The company plans to continue focusing on simplifying its operating structure and reducing exposure to volatile catastrophe risks as part of its strategic initiatives[359]. - Reorganization expenses of $29 million were incurred as part of the "How We Work" program, focusing on simplifying the company's operating structure[258]. Foreign Currency Exposure - As of September 30, 2023, total net foreign currency assets were $106 million, primarily driven by exposures to the pound sterling, Australian dollar, Canadian dollar, and other non-core currencies, mainly the Indian rupee[389]. - The pre-tax impact of net foreign currency exposure on shareholders' equity, given a hypothetical 10% rate movement, was estimated at $2.995 million for AUD and $1.418 million for CAD[388]. Regulatory and Compliance - There were no changes in the Company's internal control over financial reporting that materially affected, or are likely to materially affect, the Company's internal control over financial reporting during the three months ended September 30, 2023[392]. - The Company's disclosure controls and procedures were evaluated as effective as of September 30, 2023, ensuring timely and accurate reporting of required information[391].