Net premiums written for AXIS Capital’s Insurance segment up 5% in third quarter

Pembroke, Bermuda-based AXIS Capital Holdings Limited has reported a combined ratio of 96.6% for the third quarter of 2015, compared to 92.2% in Q3 2014, and net premiums written (NPW) for its Insurance segment of US$381 million, an increase of 5% from the same period last year.

Although NPW for the Insurance segment increased, overall NPW decreased 1% to US$677 million for the quarter, the company said in a statement on Tuesday. Net income for the third quarter of 2015 was US$248 million, compared with US$279 million for the third quarter of 2014. Net income for the nine months ending Sept. 30, 2015 was US$467 million, compared to US$607 million for the corresponding period of 2014. [click image below to enlarge]

Operating income for the third quarter of 2015 was US$51 million, compared to US$133 million Q3 2014. For the nine-month period, AXIS Capital reported operating income of US$281 million, compared with US$443 million for the first nine months of 2014, the statement said.

Looking at the Insurance segment, the company reported underwriting income of US$7 million for the current quarter, compared to underwriting income of US$16 million in the third quarter of 2014. The current quarter’s underwriting results reflected a combined ratio of 98.6%, compared to 96.6% in the prior year quarter. The segment’s current accident year loss ratio also decreased from 64.7% in the third quarter of 2014 to 64.3% in the current quarter.

During the third quarter of 2015, AXIS Capital incurred US$19 million in pre-tax losses related to catastrophe and weather-related losses, including US$10 million due to the Tianjin port explosion, which were comparable to US$19 million of catastrophe and weather-related losses incurred in the same period of 2014. For the nine month period, underwriting income was US$16 million, compared to an underwriting income of US$45 million for the same period in 2014.

The Reinsurance segment reported underwriting income of US$49 million for the current quarter, compared to US$98 million for the third quarter of 2014. The segment’s combined ratio increased to 89.7% for the current quarter, compared to 82.1% in the third quarter of 2014, the statement said, adding that this included an increase in the current accident year loss ratio from 63% in the third quarter of 2014 to 67.4% this quarter. During the third quarter of 2015, the company incurred catastrophe and weather-related losses of US$24 million, primarily due to the Tianjin port explosion loss of US$20 million, compared to US$3 million during the same period of 2014. [click image below to enlarge]

For the nine months ending Sept. 30, AXIS Capital recognized Reinsurance underwriting income of US$198 million, compared to US$304 million for the same period of 2014; the decrease was driven by a higher current accident year combined ratio primarily due to a higher current accident year loss ratio, which was impacted by business mix changes and an increase in losses due to catastrophe and weather-related events, and an increase in the acquisition costs.

Net premiums earned decreased by 6% and 8% in the three and nine months ending Sept. 30, respectively, compared to the same periods in 2014. The decrease was primarily driven by the reductions in the business written in the catastrophe, professional, agriculture and credit and surety lines in recent periods, as well as an increase in the premiums ceded, reflecting increased retrocessional covers purchased primarily in the catastrophe lines. These quarterly and year to date decreases were partially offset by growth in the motor lines, the statement said.

Albert Benchimol, president and CEO of AXIS Capital, said in the statement that the company is “confident that our actions to accelerate attractive new initiatives, optimize our portfolio, prune business challenged over the long-term, and enhance the efficiency of our platform, position us to continue to deliver shareholder value against the backdrop of an increasingly competitive market.”

He added: “Our results in the quarter include the benefits of targeted portfolio enhancements, particularly in the insurance property and professional lines, which were commenced prior to this year. However, these improvements were overshadowed by the adverse impact of volatility in our investment portfolio and unusually high offshore energy losses. These impacts are well understood and not unexpected given the performance of the equity markets and the high level of marine market losses this year.”

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders’ equity attributable to AXIS Capital at Sept. 30 of US$5.8 billion. It has locations in Bermuda, the United States, Europe, Singapore, Canada, Australia and Latin America.