Axis Capital Posts $112 Million Q1 Net Income

April 27, 2010

Bermuda based re/insurer AXIS Capital Holdings Limited reported net income available to common shareholders of $112 million [$0.79 per diluted common share] for the first quarter of 2010, compared with net income of $116 million [$0.78 per diluted common share] for the first quarter of 2009.

Operating income for the first quarter of 2010 was $96 million, or $0.67 per diluted share, compared with $156 million, or $1.05 per diluted common share, for the first quarter of 2009.

First Quarter Highlights

  • Gross premiums written of $1.4 billion, an increase of 8%
  • Net premiums earned of $696 million, an increase of 5%
  • Total underwriting income of $28 million, down 71%
  • Combined ratio of 98.3% increased 11.7 percentage points compared with 86.6%, driven by the significant level of catastrophe activity this quarter
  • Estimated pre-tax net losses, net of related reinstatement premiums, of $100 million for the Chilean earthquake and $47 million for Australian storms, European Windstorm Xynthia and U.S. winter storms, combined
  • Net favorable prior year reserve development of $81 million, pre-tax, benefiting the combined ratio by 11.7 points, compared with $84 million, benefiting the combined ratio in the same period last year by 12.7 points
  • Net investment income increased 5% to $105 million
  • Total return on cash and investments was 1.8% (pre-tax), compared to a nil return in the prior year quarter
  • Issued 5.875% ten-year senior notes with an aggregate principal balance of $500 million
  • Net cash flows from operations of $335 million, an increase of 38%
  • Operating income of $96 million, representing an annualized operating return on average common equity of 7.7%
  • Shareholders’ equity of $5.4 billion, a 2% reduction from December 31, 2009
  • Share repurchases in the open market of $287 million in the quarter
  • Diluted book value per common share of $34.56, an increase of 3% from December 31, 2009.

CEO and President of AXIS Capital John Charman stated:

We are pleased to report an increase in diluted book value per common share of nearly 3% during this first quarter of 2010. Our prudent risk management efforts have served us well as we have produced strong quarterly profitability despite the accumulated impact of an unprecedented number of worldwide catastrophes affecting underwriting profitability for a first quarter.

Our underwriting results also reflect the favorable impact of recovery in the global financial markets on certain business lines. Our capital management activities this quarter included a $500 million senior notes issuance as well as continued significant share repurchases. Given current competitive market conditions, we believe these capital management activities are in the long-term best interest of shareholders.

AXIS Capital is the Bermuda-based holding company of the AXIS group of companies. AXIS provides specialty insurance and treaty reinsurance on a worldwide basis through operating subsidiaries and branch networks based in Bermuda, the United States, Canada, the United Kingdom, Ireland, Switzerland, Australia and Singapore.

Other 2010 first quarter results of Bermuda based companies here.

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