Net income plunged due to the declining value of its alternative investments, but AXIS Capital Holdings touted solid gains in its reinsurance and insurance segments alike during the 2016 first quarter, plus a decrease in its combined ratio.
Low catastrophe and weather-related losses helped, as did an ongoing shift toward “more attractive business,” according to AXIS President and CEO Albert Benchimol.
“The strategic and tactical actions we have implemented are positively impacting our overall results, notwithstanding a competitive marketplace,” Benchimol said in prepared remarks. “We continue to improve our overall portfolio, pursuing more attractive business, while at the same time shedding business that no longer meets profitability requirements.”
The Bermuda-based specialty insurer and reinsurer said it net income available to common shareholders hit $38 million during the quarter, or $0.41 per diluted common share. This compares to $156 million, or $1.54 per diluted common share, during the 2015 first quarter. At the same time, the combined ratio dipped to 91.9, versus 93.7 over the same period a year ago.
AXIS said its reinsurance segment produced gross premiums written of $1.3 billion in Q1, up 21 percent from just over $1 billion in the 2015 first quarter, thanks to a jump in proportional business in areas including marine, liability and motor lines.
AXIS said that a jump in the level of premiums written on a multi-year basis during Q1 2016 compared to the previous year impacted the result, particularly in its credit and surety and liability lines. At the same time, the strength of the U.S. dollar partially offset, this, propelling premium decreases in treaties dominated by foreign currencies.
Net reinsurance premiums written surpassed $1.2 billion, versus $1 billion in Q1 2015. Net premiums earned jumped above $463.6 million, versus $456.6 million in the same year-ago period.
Insurance Sees More Moderate Gains
On the insurance side, AXIS said its gross premiums written in Q1 2016 came in at $653.3 billion, net premiums written surpassed $473.1 million, and net premiums earned landed above $438.6 million. In the 2015 first quarter, gross premiums written came in at $602.7 million, net premiums written hit $436.7 million and net premiums earned came close to $447.5 million.
AXIS said it achieved increased premiums written in its accident and health, property and aviation lines, thanks to new business and timing differences. Marine lines partially offset this, however, due to new business opportunities, lower rates and timing differences. Exiting Australian professional lines in 2015 also led to reduced premiums written, according to the company.
Net investment income landed at more than $49.1 million in the 2016 first quarter, a big drop versus more than $92.1 million during the same period in 2015. AXIS said this came from changes in the fair value of its alternative investments, which produced a $27 million loss during Q1 2016 over $31 million in net income a year ago.
Source: AXIS Capital Holdings