Axis Capital, the Bermuda-based reinsurer with plans to acquire PartnerRe, posted a solid set of results in the first quarter of 2015.
Its profits jumped to $156 million in the first quarter of 2015, compared with $137 million in the first quarter of 2014.
Its operating income fell slightly to $136 million for the first quarter of 2015, compared with $137 million in the prior year quarter, while its combined ratio fell to 94.3 percent, compared with 91.9 percent in the first quarter of 2014.
However, its GWP fell by 8 percent to $1.7 billion in the first quarter of 2015, compared with $1.8 billion in the first quarter of 2014.
This was mainly driven by a 12 percent fall in GWP in Axis’ reinsurance segment to $1.1 billion in the first quarter of 2015. Axis said the decrease was primarily due to two key drivers: a decrease in the level of treaties written on a multi-year basis and unfavourable foreign exchange movements.
Within its insurance segment, GWP remained flat at $603 million. This was driven by continued growth in the US primary and excess casualty markets, aviation lines, which were driven primarily by timing of renewals, and marine lines, which benefitted from new business.
The increases were offset by reductions in the property lines, which was driven by continuing competitive market conditions, and a decrease in the credit and political risk lines, impacted by a reduction in new business.
The reinsurer also spent $7 million, pre-tax, on merger costs related to the proposed amalgamation with PartnerRe.
Albert Benchimol, president and chief executive officer of Axis, said: "We are pleased to report first quarter operating income of $136 million, or $1.35 per diluted share, and annualised operating ROE of 10.3 percent. Adjusted for dividends, diluted book value grew 3 percent during the quarter and 13 percent over the last 12 months.
“Our solid underwriting results reflected low catastrophe and weather-related losses, ongoing favourable reserve development and a broadly diversified, well-constructed portfolio of risks.
“Our results reflected our tactical responses to the market environment and, importantly, demonstrated progress on our targeted portfolio enhancements and operational excellence initiatives.
“These initiatives, combined with our meaningful market presence, our technical expertise and our financial strength, position us well to continue to deliver a strong value proposition for all of our stakeholders.”
Axis Capital, PartnerRe, First Quarter 2015 Results, Bermuda, Albert Benchimol