Axis Capital records Q3 combined ratio of 156.9%, $617 million in cat losses

Axis Capital Holdings Ltd. has had a 60-point deterioration in its third-quarter combined ratio, with US$576 million in pre-tax net losses, net of reinstatement premiums from three hurricanes alone, the Bermuda-based insurer announced.

Pembroke, Bermuda-based Axis Capital, which has a branch office in Toronto, reported Thursday a current accident year loss ratio of 126.2% during the three months ending Sept. 30, and a total combined ratio of 153%.

Axis Capital writes both commercial specialty insurance and reinsurance.

The combined ratio in insurance during the most recent quarter was 156.9% and the combined ratio in reinsurance was 143.7%. The company-wide combined ratio was 92.6% in Q3 2016.

“During the month of September, our industry experienced substantial natural catastrophe loss activity, comparable to full year levels incurred in 2005 and 2011, which were the highest catastrophe loss years on record,” Axis Capital chief executive officer Albert Benchimol said in a release. “Our thoughts are with the victims of these natural catastrophes, who are in many cases still far from resuming a semblance of normal life.”

Hurricane Maria made landfall September 20 in Puerto Rico, knocking out power to the U.S. island territory. Hurricane Irma made two separate landfalls Sept. 10 in Florida, causing major flooding in Miami and Jacksonville. Hurricane Harvey made landfall Aug. 25 near Rockport, Texas, causing major flooding in Houston.

Axis Capital said Oct. 26 that the impact to Axis Capital from Harvey, Irma and Maria was $240 million, $228 million and $116 million respectively. All figures are in U.S. dollars.

Estimated catastrophe and weather-related pre-tax net losses, net of reinstatement premiums, were $617 million, Axis Capital noted.

Axis Capital reported gross premiums written of $1.186 billion in the latest quarter ($744.4 million in insurance and $441 million in reinsurance), up 23.5% from $960 million during the same period in 2016.

Net losses and loss expenses more than doubled, from $532 million in Q3 2016 to $1.225 billion in the latest quarter, when Axis Capital reported an underwriting loss of $512.8 million.

Underwriting income was $104 million in Q3 2016.

Of $744.36 million in gross premiums written in insurance in the latest quarter, $213 million was in professional lines, $154.8 million was in property, $146 million was in accident and health, $132 million was in liability, $42.48 million was in marine, $23.8 million was in aviation, $19.8 million was in credit and political risk and $12.1 million was in terrorism, Axis Capital reported.

Gross written premiums in insurance were $675 million in Q3 2016. The 10% year-over-year increase, in Q3 gross written premiums in insurance, “was attributable to our liability lines, and our credit and political risk lines driven by new business, together with an increase in our aviation lines associated with our recent acquisition of Aviabel,” Axis Capital noted.

Axis Capital announced Oct. 18 it completed its earlier-announced acquisition of London-based Lloyd’s insurer Novae Group plc. Axis announced in early 2015 it agreed to merge with PartnerRe Ltd. but PartnerRe terminated the agreement after receiving a better offer from EXOR NV, which owns a significant minority of Fiat Chrysler Automobile. Had Axis Capital and PartnerRe merged, they would have formed a global top 5 reinsurer, Axis Capital reported at the time. In November, 2016, Axis Capital announced the acquisition of Aviabel NV/SA, a Brussels-based Aviation insurer.

Axis Capital reported a 40% increase in net premiums written, from $595 million in Q3 2016 to $832.7 million in the latest quarter. For the nine months ending Sept. 30, net premiums written rose 0.3%, from $3.29 billion in 2016 to $3.3 billion this year.

The company’s net loss was $457 million in the three months ending Sept. 30, compared to $187 million in the third quarter of 2016. For the first nine months of the year, Axis Capital reported a net loss this year of 341.5 million, compared to net income of $364 million in 2016.