On July 30, 2024, Axis Capital Holdings Ltd (AXS, Financial) released its 8-K filing for the second quarter of 2024, showcasing a strong financial performance that surpassed analyst expectations. Axis Capital Holdings Ltd is a property and casualty insurance company that provides various products and services to clients and distribution partners. The company operates through its subsidiaries and branch networks in Bermuda, the United States, Canada, Europe, and Singapore, with two distinct global underwriting platforms: AXIS Insurance and AXIS Reinsurance.
Performance Overview
Axis Capital Holdings Ltd reported net income available to common shareholders of $204 million, or $2.40 per diluted common share, and operating income of $250 million, or $2.93 per diluted common share for Q2 2024. These figures significantly exceed the analyst estimates of $2.63 earnings per share and $1,524.54 million in revenue.
"This was an excellent quarter and first half of the year for AXIS defined by consistent, profitable results and strong diluted book value per share growth as we pursued our ambition of achieving specialty underwriting leadership," said Vince Tizzio, President and CEO of AXIS Capital.
Key Financial Achievements
For the second quarter of 2024, Axis Capital Holdings Ltd reported:
- Annualized return on average common equity (ROACE) of 16.2% and annualized operating ROACE of 19.9%.
- Improvement of 1.1 points in the combined ratio to 90.4%.
- Book value per diluted common share of $59.29, an increase of $2.16, or 3.8%, compared to March 31, 2024.
For the six months ended June 30, 2024, the company reported:
- Net income available to common shareholders of $592 million, or $6.93 per diluted common share, and operating income of $470 million, or $5.50 per diluted common share.
- Annualized ROACE of 24.1% and annualized operating ROACE of 19.1%.
- Improvement of 0.4 points in the combined ratio to 90.8%.
- Book value per diluted common share of $59.29, an increase of $5.23, or 9.7%, compared to December 31, 2023.
Income Statement Highlights
Axis Capital Holdings Ltd's net investment income for Q2 2024 was $191 million, a 40% increase from $137 million in Q2 2023, primarily due to higher yields from the fixed maturities portfolio. The book yield of fixed maturities was 4.4% at June 30, 2024, compared to 3.9% at June 30, 2023.
Underwriting Performance
Gross premiums written increased by $156 million, or 7%, to $2.4 billion, with an 8% increase in the insurance segment and a 4% increase in the reinsurance segment. Net premiums written rose by $127 million, or 9%, to $1.6 billion, driven by a 17% increase in the insurance segment, partially offset by an 11% decrease in the reinsurance segment.
| Key Ratios | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Current accident year loss ratio, excluding catastrophe and weather-related losses | 55.1% | 56.1% | -1.0 pts |
| Catastrophe and weather-related losses ratio | 3.6% | 2.6% | 1.0 pts |
| Combined ratio | 90.4% | 91.5% | -1.1 pts |
Balance Sheet and Cash Flow
Axis Capital Holdings Ltd's book value per diluted common share increased by $2.16, or 3.8%, to $59.29 at June 30, 2024, driven by net income, partially offset by common share dividends declared of $0.44 per share. The company returned $176 million to common shareholders year-to-date, including $100 million in share repurchases and $76 million in dividends.
Analysis and Outlook
Axis Capital Holdings Ltd's strong performance in Q2 2024, marked by significant earnings growth and improved underwriting results, underscores its strategic focus on specialty markets and disciplined expense management. The company's ability to exceed analyst estimates and deliver robust financial metrics highlights its resilience and operational efficiency in a competitive insurance landscape.
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Explore the complete 8-K earnings release (here) from Axis Capital Holdings Ltd for further details.
