AXIS Capital blames Q2 income fall on property losses and Ogden

AXIS Capital has reported that its second quarter 2017 income came to $85 million, down 29 percent on the $119.5 million it posted in the same period of 2016.

The fall takes the company to a half-year income figure of $90.04 million, down 43 percent on the $157.9 million it made in the first six months of 2016.

"This quarter we continued to take tangible actions and make strong progress in advancing our strategy to build long-term profitable growth for AXIS,” said Albert Benchimol, president and CEO of AXIS Capital. “We are reporting operating ROE of 8.6 percent and growth in book value per share, adjusted for dividends, of three percent for the second quarter. Our underwriting results absorbed the impact of a higher frequency of property losses and the continuing effect of the Ogden rate change, which reflects the benefits associated with our portfolio construction activities.”

Gross premiums written over the second quarter of 2017 increased by $42 million or 3 percent (4 percent on a constant currency basis) to $1.4 billion, with an increase of $30 million, or 6 percent in its reinsurance segment and an increase of $12 million, or 2 percent (3 percent on a constant currency basis) in its insurance segment.

However, net premiums written decreased 5 percent (4 percent on a constant currency basis) to $956 million whilst net premiums earned increased by 4 percent (5 percent on a constant currency basis) to $981 million.

At the same time the combined ratio for the quarter was 97.6 percent, down from the figure of 102.2 percent that it reported in the same period of 2016.

“We continue to enhance the AXIS franchise, dedicating more resources to data and analytics, recruiting top talent, and expanding our activities with strategic capital partners to do more for our clients and brokers and earn attractive fee income, and furthering our strategy of growing scale and relevance in attractive markets,” Benchimol continued.

“In addition to organic growth in targeted lines of business during the quarter, we closed on the acquisition of Aviabel, a European specialty aviation (re)insurer and, earlier this month, we announced our offer to acquire Novae Group plc, a diversified specialty (re)insurer operating through Lloyd’s of London. Our proposed acquisition of Novae would accelerate strategic initiatives and strengthen our positioning in the important London market for international specialty risks.”

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