AXIS Capital blames September storms for Q3 losses
AXIS Capital Holdings has announced that it made a loss of $468 million over the third quarter of 2017, down on the profit of $177 million that it made over the third quarter of 2016.
In a statement Albert Benchimol, president and chief executive officer of AXIS Capital, said: "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. Our thoughts are with the victims of these natural catastrophes, who are in many cases still far from resuming a semblance of normal life. Our staff remains committed to supporting those in need and resolving claims as expeditiously as possible. We know that the aftermath of catastrophic events is a time when our clients depend on us the most, and here at AXIS, we take pride in demonstrating the real value of our products and services.
"The financial impact of this series of events was consistent with our expectations, reflecting lessons learned from prior large cat experience and recent changes to our portfolio. Our diluted book value per share, adjusted for dividends, declined 8 percent over the prior quarter. Excluding the impact of catastrophes, our annualised operating return on average common equity was 10 percent, reflecting the benefits of our profitability improvement initiatives, absorbing the ongoing negative impact of rate and trend and the Ogden rate change. We expect the market to react strongly to industry losses this quarter, which when combined with low interest rates and sustained multi-year pricing erosion, will drive adjustments to risk-based pricing.
"As a leader in the global wholesale marketplace that absorbed so much volatility, we are strategically well positioned for improving conditions. Importantly, we recently completed the acquisition of Novae, which creates a $2 billion participant in the London specialty market, with a top-10 position at Lloyd’s within a $6 billion international specialty (re)insurer. Our teams are working to ensure our operations are brought together seamlessly to maximise our ability to respond to opportunities, and, most importantly, we are encouraged by the positive market reaction to the combination. We are optimistic that the international specialty insurance market will deliver more benefits than we originally contemplated when the transaction was announced, and that we will approach the January 2018 renewal season with a strong platform, a strengthened brand, and a renewed commitment to deliver a superior value proposition to all of our stakeholders."
AXIS Capital said that gross premiums written over the quarter increased by $226 million, or 24 percent, to $1.2 billion, with an increase of $157 million, or 55 percent (56 percent on a constant currency basis), in its reinsurance segment and an increase of $69 million, or 10 percent, in its insurance segment.
